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Indonesian members of parliament approved the final draft of a long-awaited land bill on Wednesday that investors hope will speed up land acquisition for government infrastructure projects in Southeast Asia’s biggest economy.

Inadequate infrastructure is seen as both a hurdle to higher growth and an investment opportunity in a country where roads, ports and airports are overloaded as trade booms.

Weak infrastructure was cited by Fitch Ratings as an obstacle to the agency upgrading the country to an investment grade rating.  

So the passing of the bill could increase the chances of an upgrade next year that would put it on a par with nations such as Brazil, Russia and India, and lead to further investment.

A parliamentary committee, which has been working on the bill since it was submitted last year, approved a final draft on Wednesday, said Taufik Hidayat, the committee’s deputy head.

It will now go to a House of Representatives (DPR) plenary session, which could pass it on Friday.

The bill will still need a decree from the president within a year to be implemented, under Indonesia’s slow law-making process.  

“The bill has given the foundation ... It depends on the implementation,” said Hidayat, of legislation that would effectively gives the state the right to expropriate land at a price and set time limits on landowner appeals.  

Shares in Indonesian construction, property and toll road firms have rallied this week on hopes the bill would be passed, after Hidayat said last week the wording was being finalized.

“The land bill is needed by construction companies because once it’s done, they can go on with all the toll roads projects that were halted,” said Jemmy Paul, a fund manager at Jakarta-based Sucorinvest Asset Management, which oversees $230 million.   

Bankers say the delay in passing the bill has been holding up the dispersal of loans to companies for infrastructure development this year.

The country’s main toll road operator, Jasa Marga, told Reuters last year that without the bill, the company was like a race car waiting for a track.  

Sucorinvest sees the bill as positive for firms such as Wijaya Karya, Citra Marga Nusaphala Persada and Adhi Karya, Paul said.

The bill would only apply to government projects, but is likely to allow for privately operated projects on government-bought land, since the government is relying on $100 billion of private investment to overhaul its roads, railways and ports.

Without better infrastructure, analysts say the country’s growth may start to slow because of capacity constraints.

“There’s a fear that Indonesia’s economy would have a hard landing if infrastructure does not get fixed. Infrastructure is a bottleneck in the economy,” Paul said. “By fixing this, Indonesia’s GDP can be boosted again.”

Policymakers in the G20 member are relying on strong domestic consumption, lending and investment to shield the economy from a global downturn, and push it from current GDP growth of 6.5 percent towards a potential 7 percent.

Bank Indonesia, which has slashed its benchmark overnight interest rate to a record low 6 percent to spur the economy, has urged local lenders to cut their own lending rates and lift loan growth that is already buoyant at over 25 percent.

“We understand that the country needs infrastructure development but the problem is the disbursement of loans. We’ve prepared Rp 20 trillion ($2.21 billion) for roads only.

We’re ready, willing and able,” said Gatot Suwondo, the CEO of Indonesia’s fourth largest lender, Bank Negara Indonesia.

Reuters