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Indonesia-Russia Aircraft Deal to Be Signed in November

 
 

Indonesia and Russia are expected to sign an agreement for the procurement of 11 Russian-made Su-35S ‘Flanker-E’ multirole fighter jets for the Indonesia Air Force (TNI-AU),  Indonesian Defense Minister Ryamizard Ryacudu announced on September 20, according to local media reports.

“The Sukhoi purchase has been finalized and will be signed this November,” the minister told reporters in Jakarta. The major obstacle during the negotiations, which kicked off over two years ago in November 2015 with the establishment of a joint military-technical cooperation commission, appears to have been details involving offset obligations and countertrade deals.

Indonesian law stipulates an offset value of at least 35 percent that includes the establishment of maintenance, repair, and overhaul facilities (MRO) as part of a legal indigenization requirement, as well as countertrade that will consist of rubber, coffee, palm oil, tea, and other Indonesian commodities in exchange for the aircraft. Overall, Indonesia is slated to export commodities equal to 50 percent of the total US$1.14 billion contract, the defense minister said.

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In August, Indonesian state-owned trading company PT Perusahaan Perdagangan Indonesia and Russia’s state-owned defense holding company Rostec concluded a memorandum of understanding on possible countertrade deals. In 2003, Indonesia also paid for Russian-made SU-27SK and SU-30MK fighter jets through counter-trade deals. Corruption allegations against Indonesian businessmen and government officials involved in Indonesian-Russian countertrade deals led to a parliamentary inquiry at the time.

The Su-35 purportedly is an impressive piece of military hardware, as I reported in August:

The Su-35 (NATO reporting name: Flanker-E) Fourth++ generation is one of Russia’s most advanced fighter aircraft. It is a highly maneuverable multirole fighter jet, powered by two 117S turbofan engines, and equipped with the Irbis-E passive-electronically scanned-array radar capable of tracking up to 30 targets simultaneously and reportedly able to engage up to eight. The Su-35 is the latest variant of Russia’s Flanker-series.

Furthermore, I noted that they will not be the first Russian-made fighter jets operated by the Indonesian Air Force:

[T]he TNI-AU is already operating five Russian-made Su-27s and 11 Su-30 MK/MK2s.  The Su-35 fighter jets will replace U.S.-made F5 E/F Tiger II  aircraft, which had been in service with the TNI-AU since the 1980s and have been retired over the last years.

The Indonesian military has entered the second phase of its 2014-2019 military modernization plan that includes major upgrades to it fleet of fighter aircraft in August. Among other things, Indonesia is slated to purchase ten more F-16A/Bs fighter jets in addition to the 14 currently in service purchased from the United States under a $750 million Excess Defense Articles (EDA) contract. Indonesia will also contribute 20 percent of development cost for the Korea Aerospace Industries (KAI) KFX next-generation stealth fighter jet.

However, the Indonesia government has been struggling to fund its defense spending and analysts are expecting delays in the acquisition of big ticket items.

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