The government is reluctant to accept Washington's offer of a US$3.8 billion upgrade package for Taiwan's existing F-16A/B fighter jets, sources told the United Evening News yesterday.
The US' Letter of Offer and Acceptance (LOA) for the retrofit project arrived in May and local authorities are considering whether to sign or conduct further negotiations before the July 26 deadline, the report said.
The report quoted military sources as saying the Air Force has made signs of approving the LOA.
The Ministry of National Defense (MND) is currently mulling over whether to accept the deal approved by the US government last September that is aimed at upgrading Taiwan's total number of 145 F-16A/B jets.
The report, however, quoted senior government officials as expressing reluctance over such an expensive deal.
Government officials are asking the Air Force to reconsider other options, especially for the AESA radar system that is expected to replace the current radar system used by the fighter jets, it said.
The AESA radar system upgrade could cost as much as US$600 million (S$752 million) since the system needs to be redesigned for the upgrade, which would require a large sum of money.
No F-16A/B jets are equipped with the system.
Therefore, if it were installed in the F-16A/B, it would require the American side to tailor a unique model for Taiwan, military sources said.
The US has promised to subsidize the additional cost of the custom design if there are other countries interested in purchasing the AESA radar system on F-16A/Bs in the future, the report said.
Asked to comment on the report, military spokesman Luo Shou-he yesterday confirmed that the MND is considering the US deal.
The military will make its final decision based on the need of the local armed forces in the hope of making the best use of limited defense budget, he added.
In September, 2011, the US approved the sale of a retrofit and training package for Taiwan's F-16A/B fighters.
Taiwan is still eager, however, to acquire the more advanced F-16C/D fighters to narrow the air-power gap with China.
The US proposed that the retrofit package could also include the JHMCS helmet-mounted aiming system and AIM-9X short-range air-to-air missiles.