Bogor. Indonesia and Japan have agreed to step up maritime security and start discussions on a major railway project to link Jakarta and Surabaya in East Java, the two countries' leaders said on Sunday (15/01).

Japan has historically been one of Indonesia's biggest investors, but it was dealt a blow in 2015 when President Joko "Jokowi" Widodo's government awarded the contract for a high-speed train project linking Jakarta and Bandung, West Java, to China.

The tensions surrounding the railway deal seemed to have eased on Sunday, when Japanese Prime Minister Shinzo Abe said after a meeting with Jokowi in Bogor, West Java, that his country would cooperate with Indonesia to build railways and other types of infrastructure.

The two leaders also discussed North Korea, with Abe saying that the country's development of nuclear capabilities and missiles has reached "a new level of threat."

North Korea said last week that it can test launch an intercontinental ballistic missile at any time from any location chosen by leader Kim Jong-un. The county also said the United States' hostile policy towards it was to blame for its arms development.

On the South China Sea, Abe said Japan believes in the importance of upholding international law and solving disputes peacefully.

"The South China Sea issue has drawn the attention of the international community and it directly affects peace in the region," Abe said.

Maritime security cooperation is of utmost importance for fellow maritime nations, Japan and Indonesia, he added.

"Japan will actively encourage cooperation in maritime security and the development of Indonesia's remote islands," the prime minister said.

China claims almost the entire South China Sea, which has around $5 trillion worth of trade passing through annually. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claim to parts of the sea.

Although Indonesia is not part of the dispute, it does object to China's claim to the waters around the Natuna Islands.

Railway Wars

Winning the contract in 2015 for the Jakarta-Bandung high-speed railway, estimated to cost $5.5 billion, was a coup for China, which is vying for influence in the region under its "One Belt, One Road" policy as part of its ambitions to become a global train supplier.

The roughly 600-kilometer Jakarta-Surabaya project is likely to cost less than the Jakarta-Bandung railway, as it will run at a slower speed, while most of the land for the project has already been secured, according to Indonesia's transport minister.

The minister told Reuters in October that the government invited Japan to work on the Jakarta-Surabaya project, which is aimed at slashing journey times between the capital and the East Java city by more than half, to around five hours.

Japan and Indonesia also plan to develop the Masela gas block in Maluku Province and Patimban Port in West Java, Jokowi said on Sunday.

On other regional issues, Abe said North Korea's kidnapping of Japanese citizens is a very important challenge for his administration to resolve.

Pyongyang admitted in 2002 to kidnapping 13 Japanese citizens a decade ago. Abe has made resolving the emotive issue a signature pledge of his political career.

Additional reporting by Reuters