South Korea’s defense acquisition agency has struck a deal with Korea Aerospace Industries, the country’s sole aircraft maker, to develop home-built military and civilian helicopters by 2022, officials said Wednesday.

With the deal worth 1.64 trillion won ($1.49 billion), Seoul seeks to develop the “Light Armored Helicopter” to replace aging 500MD and AH-1S military choppers, based on the “Light Civil Helicopter” that will also be developed under the deal.

For the development of the LAH and LCH, KAI is to get technical assistance from Airbus Helicopter. The two firms signed an agreement to jointly develop the helicopters last month, officials from the Defense Acquisition Program Administration said.

“There have been differences between DAPA and KAI over a number issues including the percentage of indigenous components to produce the helicopters,” a DAPA official said, declining to be named. “But we reconciled them through 20 rounds of marathon talks from last August until last month.”

Although DAPA and KAI have reached an agreement over the overall technological development, they have yet to conclude their negotiations over the development costs. Their talks over the costs will be finalized later this month, and the two sides are expected to sign a final agreement for the helicopter project in May, DAPA officials said.

The project to develop the military helicopter is led by DAPA, while the Ministry of Trade, Industry & Energy is in charge of developing the civilian helicopter. The LAH project is estimated to cost 692.6 billion won, while the LCH project will cost around 950 billion won.

KAI is to develop the LCH based on Airbus Helicopter’s EC-155B1 platform. It will then transform the LCH into the LAH ― a military chopper with defensive and offensive equipment such as antitank missiles and machine guns. The LAH and LCH are to share more than 50 component parts.

According to the government plan, while the LCH will be developed in 2020, the LAH is to be developed in 2022.

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