Jakarta wants to review its involvement in the Korea Aerospace Industries (KAI) K-FX fighter programme.
Following recent media reports stating that it would review the initiative, Defence Minister Ryamizard Ryacudu confirmed Jakarta's position in a television interview.
Nonetheless, Ryacudu believes Jakarta should stay in the programme given the money it has already invested.
He added that the development contract for the aircraft, signed between KAI and Indonesian Aerospace in early 2016, was somehow "incomplete", though he provided no details.
Indonesian Aerospace declined to comment on the review.
An industry source says KAI is not sure how things will play out. Jakarta has already invested $200 million in K-FX, but recently missed a $100 million payment.
A portion of these funds was intended to pay Indonesian researchers on KAI's payroll at its factory in Sacheon.
In 2016, Jakarta committed to pay $1.6 billion toward the fighter's development costs, about 20% of the estimated total development costs of $8.5 billion.
The source adds that the prevailing view is that Jakarta is using K-FX to obtain more concessions from Seoul, such as an order for additional CN-235 maritime patrol aircraft. The topic is likely to be an issue when Indonesian president Joko Widodo visits South Korea in July.
Flight Fleets Analyzer shows that South Korea's coast guard has four in-service CN-235 aircraft, all of which were produced by Indonesian Aerospace in Bandung, where it produces the Airbus Defence & Space type under licence. The average age of these assets is 6.6 years, and Seoul has options for two additional units.
The source downplayed recent reports suggesting the USA is concerned about the sharing of sensitive technologies with Indonesia. Lockheed Martin, as part of offsets associated with Seoul's order for 40 F-35As, is helping with the development of the K-FX.
"Export Licences are of secondary concern, because South Korea is developing some of these technologies on its own," he says.
He notes that local company Hanhwa Systems is developing the aircraft's active electronically scanned array (AESA) radar, a project in which Israeli firm Elta is providing assistance.
In 2015, the K-FX programme received a major setback when it emerged that the US was unwilling to provide export licences for four core fighter technologies: AESA radars, infrared search and track (IRST), electro-optical target tracking devices, and jammers.
The worst case scenario for KAI is a complete withdrawal of Indonesia. If this eventuality, which is deemed improbable, were to occur, then KAI would need to make up Indonesia's share of the development budget - or find another international partner.
The K-FX programme envisages 120 twin-engined fighters delivered to South Korea's air force, and 80 to Indonesia.
The South Korean and Indonesian examples are likely to be different. Previously, officials have said that a Block I configuration without stealth coatings and the ability to carry weapons internally will go to Indonesia. South Korea will have a Block II aircraft, with stealth coatings and weapons bays.
This is a source of concern to KAI. Developing two major variants of the jet would increase costs and complexity.
The K-FX will be powered by two General Electric F414 engines. In addition to the engines, the type will have a significant degree of foreign content.
In February, UTC Aerospace Systems announced that it will provide the jet's environmental control system, which includes air conditioning, bleed air control, and cabin pressurisation and liquid cooling. It will also supply the K-FX with air turbine starters and flow control valves.
In addition, Cobham will provide the fighter's weapons carriage and release equipment, while Meggitt will furnish the aircraft's nose and main wheels, carbon brakes, and the brake control system.
The detailed design phase for the twin-engined type will run until late 2019, at which point the production of prototypes will commence. A first flight is planned in the middle part of 2022, with testing and evaluation to run until 2026.