UPDATE 1-Singapore expected to order F-35 fighter jets soon -sources

SINGAPORE, March 14 (Reuters) - Singapore is in the "final stages of evaluating" the F-35 Joint Strike Fighter to upgrade its air force, a process U.S. sources say should turn quickly into orders for more than a dozen of the stealthy warplanes that have been beset with cost overruns and delivery delays.

Singapore, a major business and shipping hub with the best-equipped military in Southeast Asia, is expected to submit a "letter of request" soon for the F-35, said two U.S. government officials who were not authorized to speak publicly on the matter.

The city-state could start the process of buying the planes, built by Lockheed Martin Corp, in coming weeks, one of the officials said. Pratt & Whitney, a unit of United Technologies Corp, makes the engine for the F-35.

An order from Singapore would be good news for the F-35, the Pentagon's largest weapons program, at a time when Washington might be forced to further scale back its own F-35 purchases, unless the U.S. Congress manages to avert $46 billion in additional defense budget cuts that took effect on March 1.

An order would also reflect growing concerns about China's military expansion, said Richard Aboulafia at the Teal Group. "Clearly China is a pressing strategic and diplomatic challenge, and buying F-35s looks like a sensible response to this pressure."

Singapore's defense minister, Ng Eng Hen, said on Tuesday the air force "has identified the F-35 as a suitable aircraft to further modernise our fighter fleet".

"Our F-5s are nearing the end of their operational life and our F-16s are at their mid-way mark," he said in parliament. "We are now in the final stages of evaluating the F-35."

Ng gave no timetable but said the defense ministry "will have to be satisfied that this state-of-the-art multi-role fighter meets our long-term needs, is on track to be operationally capable and, most importantly, is a cost-effective platform."

Lockheed said it is pleased to support Singapore as it carries out an evaluation of the F-35. "We stand ready to assist the government of Singapore and the U.S. government on the F-35 program," said spokesman Michael Rein.

Any sale of F-35 jets to Singapore would be handled between the two governments as a "foreign military sale".

Singapore's air force now has 24 F-15SGs, 20 F-16Cs and 40 F-16Ds, 28 F-5Ss and nine F-5Ts, according to the International Institute for Strategic Studies. It also has 19 AH-64D Apache attack helicopters among other assorted aircraft.

Industry and U.S. sources said Singapore is expected to buy up to 75 new jets over time, probably in smaller batches.

The wealthy island nation of about 5.3 million people plans to spend S$12.3 billion ($9.85 billion) on defence in the 2013 fiscal year that starts in April, a rise of 4.3 percent from the previous year, the government's budget shows.

Singapore - home to a global financial centre, the world's second-busiest container port and major energy operations - is the region's biggest military spender, dwarfing its much larger neighbours Thailand, Indonesia, Malaysia and Vietnam.

BEHIND SCHEDULE AND OVER BUDGET

As Washington turns its economic and security attention to the fast-growing Asia-Pacific region, it is encouraging more exports of weapons such as the F-35 to strengthen links with allies and offset cuts in its own procurement programmes.

Lockheed, under a $396 billion program that is already seven years behind schedule and 70 percent over initial cost estimates, is building three models of the F-35 for the U.S. military and eight international partners that are helping to fund the plane's development.

The development partners are Britain, Australia, Canada, Norway, Denmark, Italy, Turkey and the Netherlands. But rising costs, delivery delays and budget pressures have forced some to rethink the size of their orders and consider alternatives.

Singapore became a minor partner in the programme in 2003, along with Israel, which has ordered 19 of the jets so far. Japan has also ordered 42 F-35 A-models for its military.

Singapore's F-35 order is expected to include the Marine Corps' B-model, which can take off from shorter runways and lands like a helicopter, said a source familiar with that variant of the plane.

Due to the city-state's small size and limited air space, its air force trains its fighter pilots in the United States and its helicopter pilots in Australia.

Singapore was the world's fifth-largest importer of conventional weapons in 2008-12, at 4 percent of the global total, trailing India, China, Pakistan and South Korea, the Stockholm International Peace Research Institute says.