South Korea-Iraq Defense Agreement Faces Unexpected Hurdles
– It has come to light that LIG Nex1, the principal contractor of the M-SAM arrangement, finalized the $2.6 billion agreement without contracts with local suppliers such as Hanwha
– LIG Nex1 is unable to timely provide the surface-to-air interceptor to Iraq without the supply of vertical launchers, vehicles, and radars manufactured by Hanwha.
The recent defense accord between South Korea and Iraq regarding the provision of surface-to-air interceptors has encountered an obstacle following the principal contractor LIG Nex1’s announcement of the $2.6 billion agreement on September 20.
As per Korean media reports and industry insiders, LIG Nex1 executed the deal on the M-SAM II (Cheongung-II), a medium-range surface-to-air missile interceptor, without securing arrangements with its local suppliers, including Hanwha Aerospace and Hanwha Systems.
Commonly referred to as the Korean equivalent of the U.S. Patriot missile system, the M-SAM is crafted to counteract both ballistic missiles and aerial threats. LIG Nex1, as the primary contractor, is tasked with integrating systems, which encompass the vertical launch platform, launcher vehicle developed by Hanwha Aerospace, and the multi-function radar engineered by Hanwha Systems.
Iraq becomes the third nation to order the M-SAM missile interceptor following the United Arab Emirates and Saudi Arabia in previous years; however, executing the latest arrangement may pose challenges due to procedural complications.
“Without the essential systems of launchers and radars, the operation and sale of the M-SAM is not feasible,” stated a Korean industry insider. “This is an extraordinary situation where a principal contractor finalized a contract absent supply agreements, which could lead to issues with the customer nation.”
The Defense Acquisition Program Administration, South Korea’s arms procurement authority, convened an urgent meeting on September 24 to address the matter but did not achieve a resolution, according to sources.
“In July, we responded to LIG Nex1’s inquiry for a quote but did not receive any feedback regarding its acceptance,” a Hanwha representative was quoted by Yonhap News Agency. “Subsequently, LIG Nex1 proceeded with signing the contract without our awareness.”
The representative emphasized that his firm needed to assess the evolving security landscape in Iraq and the nation’s financial capabilities before determining the price for exports, which is standard procedure prior to finalizing a deal.
During a press conference on September 23, Lee Hyun-soo, an executive of LIG Nex1, indicated that his company had discussed the status of negotiations with Iraq but did not verify whether an agreement with Hanwha was secured before signing.
