Rising costs of the upgrade of its fleet of F-16’s have caused tension between Taiwan and the US, as the angry Taiwanese decided to postpone the already long-delayed agreement, writes defense expert Wendell Minnick in Defense News.
In September 2011, the U.S. released a $5.3 billion upgrade package that included an active electronically scanned array (AESA) radar. The U.S. Air Force has been pressuring Taiwan to pay for nonrecurring engineering (NRE) costs related to integrating the radar.
An NRE is the one-time cost to research, develop, design and test a new system. AESA refits are being competed in other Asian countries, and if Taiwan waited until South Korea made its AESA selection, Taiwan could save money on its deal, said Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council.
As the economy continues to shrink and defense budgets take hits, Taiwan’s Ministry of National Defense (MND) is facing huge hurdles as it struggles to pay for $13 billion worth of military hardware released by the U.S. since 2008. Taiwan is also implementing costly force structure realignment and moving from conscription to an all-volunteer system…