The Hidden Costs of Traffic Congestion in KL

Looking at a recent study conducted by the World Bank, we explore the hidden personal and societal costs of traffic congestion in Kuala Lumpur and explore the advantages of greener and healthier transport choices like bicycling. The morning and afternoon commute, the hours spent driving those dreaded kilometers to and from work, have you ever wondered how much sitting in a traffic jam really costs you and Malaysia?

Many developing Asian cities are finding it difficult to cope with the growth of urbanization and increased car ownership. How is the resulting traffic congestion adversely affecting our development? Studies this year by economists at the World Bank have shown that in 2014, economic losses due to traffic congestion in Greater Kuala Lumpur was estimated at around RM20 billion per year or RM54 million every day! The majority of this cost is associated with lost productivity, followed by wasted fuel costs and environmental damage caused by the tailpipe exhaust fumes from wasted fuel.

“Time is Money”

Time spent stuck in traffic could have been used more productively. This is what economists call “opportunity cost”. For example, instead of wasting time in traffic you could have put another productive hour at work. The World Bank has estimated that the annual cost of delays due to congestion, taking into account the monetary value of a person’s time in Kuala Lumpur, is RM10-20 billion. This is the value of the total time lost due to people sitting in traffic doing nothing productive. Notably, this also amounts to 1 million wasted hours per day!

Other direct costs include the amount of fuel wasted in traffic. This is calculated with the extra running-time, which can be translated to extra petrol used in stop-go traffic. This figure annually for KL translates to approximately RM1-2 billion worth of extra petrol wasted because of congestion.

This extra petrol burnt obviously means greater environmental/social damage. From a recent International Monetary Fund study, the environmental cost to society, primarily due to air pollution, from using one litre of petrol is RM2.20. This adds another RM1.0-2.5 billion to the cost of congestion in Kuala Lumpur per year.

 Traffic congestion cost figures by the World Bank (2015)

Traffic congestion cost figures by the World Bank (2015)

Slow traffic, faster death

Apart from direct hidden costs, what about indirect hidden costs? These include degradation of public health by inducing physically inactive lifestyles and stress from traffic congestion. A city built around the car means less space for pedestrians and cyclists. According to a report from the World Health Organization (WHO), Malaysia has one of the most physically inactive populations in the world, with more than 50% of the population classified as being “inactive”, while the global average is only at about 20%. Being “inactive” is classified as having less than 150 minutes of moderate-intensity exercise per week, such as a brisk walk. Compared to countries with a strong cycling culture, Malaysia is more than three times inactive than for example the Netherlands (The Economist). The UK Department of Health has termed inactivity as the “silent killer” or “the new smoking”. This should come as no surprise as the lack of physical exercise is known to lead to various dangerous health conditions such as obesity, diabetes, heart disease and various forms of cancer (WHO).

Traffic – the silent killer (UK Department of Health)

Traffic – the silent killer (UK Department of Health)

Long congested morning and afternoon commutes are also associated with higher stress levels. In Malaysia, a report by the renowned market analysis consultants, Frost & Sullivan, discovered that over 40% of Malaysians found road congestion as their number one frustration. In the long run, excessive stress can have health consequences, which will be costly to treat. On the whole, commuting seems to lead to a general decrease in happiness and individual well-being.

Infographic - Activities and Satisfaction Levels. By IEN Consultants

Infographic – Activities and Satisfaction Levels. By IEN Consultants

Causes of Congestion: Ownership or Usage?

The key cause of congestion is the lack of public transportation options, coupled with increased car ownership as a result of urbanization. Over 70% of Malaysia’s population now live in urban centres, compared to 40% in 1985. As income increases, the desire/ability to own a car also increases. Increased car ownership does not necessarily lead to road congestion on its own, it only becomes a problem if everyone uses their car on a daily basis. For example, you can use your car on weekends, but commute daily using public transport. The lack of comprehensive public transport options, the long connecting/waiting times, and the problem of getting to and from key public transportation lines (the first and last mile problem), means at times it can take people up to three times longer to commute with public transport than by car (World Bank, 2015). This has led to 80% of inhabitants in KL using their private car for their daily commute. However, where public transport options are available, e.g. in Hong Kong and Singapore, private car use for commuting is only 10% and 40%, respectively.

High Private Costs

Moreover, the lack of a comprehensive public transportation network further marginalizes the poorest in the urban population. Owning a car or a motorcycle further adds pressure to their weak finances. Given the limited alternate transport choices, there is almost no way around owning a motorized vehicle. As a proportion of an average household’s income, Malaysians spend 50% more on transport compared to households in cities with effective public transportation, e.g. Hong Kong or Tokyo (World Bank, 2015).

Jakarta or Singapore?

Even with new roads and expressways, congestion is still a growing problem. Should Malaysia move backwards and become as infamous for its congestion as Jakarta? Or should it adopt a different approach, as is done in modern Asian cities such as Singapore, Hong Kong or Tokyo? One of the obvious solutions is to build more public transportation networks, for example with the new MRT lines. The second step, according to the World Bank, is to create effective incentives to influence behavior, i.e. to implement effective taxation policies. Such policies would include taxes on petrol, congestion charges, increased toll fares at peak hours etc. This may seem unpopular, however if a viable alternative to private transport existed, opting to move away from the car could actually save each household money on transportation costs. In addition, taxes collected can be used to further fund public transportation projects.

The Future: Driverless Cars and Bicycles?

In a recent report written by strategy consultants McKinsey, commissioned by the European Union, discussed the use of driverless cars and comprehensive carpooling to enhance urban mobility and reduce congestion. Such ideas may be decades out in the future, but would certainly improve utilization efficiency, reduce environmental damage, and improve road safety.

Although driverless cars may seem far-fetched, the increased use of bicycles is not. Using bicycles to mitigate the “first and last mile” problem could be worth pursuing. Specifically, battery-assisted bicycles will alleviate perspiration problems in the hot and humid tropics. Imagine if you can simply cycle to the MRT station from your home, take your bike with you onto the MRT, and cycle a few kilometers from the MRT station to your work place. Such a model is already practiced in European cities such as Copenhagen.

Infographic - CO2 emissions from transport. By IEN Consultants

Infographic – CO2 emissions from transport. By IEN Consultants

Re-focusing on People: “Livable Cities”

This mode of transport not only reduces the cost to your wallet, but also has health benefits by keeping you physically active and reduces your environmental footprint. Building an infrastructure for such a mode of mobility may include more bicycle lanes and green areas. By moving in this direction, the city will also become more “livable”, more outdoor green spaces often lead to a greater number of people, which not only allows for greater social interaction, but also improves public safety through the “safety in numbers” principle. Research has shown that social interaction gives the highest levels of human satisfaction. At the other end of the scale is private car commuting as the least desirable. Some European cities have gone as far as banning cars in their city centres. This is the case for Oslo, which plans to re-focus the city centre around people by 2019. Oslo is not alone; Madrid plans to achieve a car-free centre by 2020. The benefits of livable cities are many: greater mental and physical well-being, reduced environmental impact, and reduced financial cost.

Concluding Thoughts

Our car-centric society has many unwanted consequences. As income increases in Malaysia, the emergence of more and more cars on the Malaysian road has outstripped our ability to expand road capacity. Traffic congestion annually causes billions of Ringgits worth of “hidden costs” through time-wastage, and damages to the environment from overuse of petrol. Other subtler costs include adverse health effects from physical inactivity and a reduced mental well-being. Something needs to be done, be it building a more comprehensive public transportation network or encouraging people to take to a more active lifestyle, for example cycling more. Perhaps it is time for city planners to reclaim the city roads as that attractive social space with human interaction that they used to be? Where cars and their associated air and noise pollution are not part of the solution, but perceived as part of the problem?


  • Cartoon, infographics and photo by Bjorn Bull Hansen and Chew Pui Cheng, IEN Consultants,
  • CO2 Emissions Per Type of Transport:,
  • EU & the Circular Economy by McKinsey:
  • Levels of Satisfaction: Kahneman, D., Krueger, A. B., Schkade, D., Schwarz, N., & Stone, A. A. (2004). A survey method for characterizing daily life experience: The Day Reconstruction Method (DRM). Science, 306, 1776-1780.
  • NHS:
  • The Economist: published on September 5th 2015, p59-60.
  • WHO:
  • World Bank Study: “Malaysian Economic Monitor, Transforming Urban Transport (June 2015)”:


Photo of authors. Mickey Jensen and Gregers Reimann, IEN Consultants

Photo of authors. Mickey Jensen and Gregers Reimann, IEN Consultants

This article is contributed by Mickey Jansen and Gregers Reimann from IEN Consultants Sdn Bhd.