Jakarta. A Chinese investor has shown strong interest in investing in the construction of railway infrastructure connecting Medan with Lake Toba in North Sumatra.

"The Chinese investor wants to build a railroad from Medan to Lake Toba. I thought they wanted to make a small investment, but they said they have up to $10 billion available," Chief Maritime Minister Luhut Binsar Pandjaitan said in a statement on Thursday (13/07).

However, Luhut said the investor will be required to comply with government policies and regulations to build the planned railway that will connect Medan with Lake Toba via Kualanamu, Tebing Tinggi and Pematangsiantar.

"I said 'you have to follow the rules of engagement in Indonesia, it cannot be you [or any foreign investors] arranging the project,'" Luhut said, without naming the investor.

Five potential investors from Russia also visited North Sumatra last year to conduct a survey for a railway line.

"Investors want to come in, which means the Lake Toba region is strategic for investors. The government has made various improvements in investment procedures, such as simplifying regulations, improving transparency and speeding up decision making," he added.

Tourism Minister Arief Yahya added that the government has decided to build a railway between Medan and Parapat, which is located at Lake Toba, this year with funds from the state budget and also from investors.

"If there are incoming funds from investors, the state budget can be used for other matters," Arief said.

The planned railway will allow travelers from Medan to reach Lake Toba in about three-and-a-half hours, compared to six hours by road currently.