KAI builds aircraft development center and gears up to launch KF-X program.

The building will be built by POSCO Engineering Co. at the company's production line in Sacheon, 437 kilometers southeast of Seoul. It will be seven stories tall with a floor space of 24,496 square meters on 4,231 square meters of land.

The center is part of a broader ongoing effort by KAI to hire more engineers and assembly line workers after it was tapped in July as the primary negotiating partner to develop the country's next light civilian helicopter (LCH) and light armed helicopter (LAH) project.

KAI announced in August that it will hire 1,000 new workers for the LCH and LAH, as well as the KF-X program.

After much delay, Seoul is expected to pick a preferred bidder in November and sign a formal development contract in December. This could open the door for work to start in earnest in 2015.

KAI has said it will wait and see which company the government chooses, but the prevalent view is that the domestic aerospace company is the only realistic option.

The South Korean Air Force's aging fleet of F-4 and F-5 jets are effectively reaching the end of their service and must be replaced with more modern planes in the near future.

The KF-X will be a twin-engine jet with capabilities slotting above the Air Force's current KF-16 fighters, but below the stealth F-35s it wants to buy from the United States. If development takes place according to plan, the first delivery should take place in the middle of the next decade.

"KAI, with its vast know-how accumulated through the development and production of the KT-1, T-50, FA-50 and KUH-1 Surion medium choppers, is confident it can develop the KF-X," the company said.

Besides getting ready on the hardware front, KAI is working with the government to conclude negotiations on the transfer of technology that will be needed for the KF-X. It said the talks may be concluded within the month at the earliest.

On the crucial issue of overseas investments that could defray the development costs of 18 trillion won (US$17.4 billion) over 10 years, KAI said both Lockheed Martin and Indonesia are optimistic about a partnership.

"Lockheed Martin helped develop the T-50, having footed 13 percent of the development costs, and is currently working to sell the supersonic trainer for the U.S. T-X project," KAI said. In the case of Indonesia, which has purchased the KT-1 and T-50, the aerospace company said a "special relationship" exists and that negotiations are entering the final phase.