Economics of Traffic Congestion of Kathmandu Valley

This research paper provides the calculation of estimated economic costs of traffic congestion in the Kathmandu valley. This research paper based on the various literatures. The focus of this research to examine traffic congestion cost related with economic road passenger, transportation, depreciation, corban emission and excess fuel. Beside these the economic health position and indirect costs to all sectors. Its small mirror of economic and socio-economic activities of Kathmandu valley. Households and vehicles are increasing rapidly in Kathmandu valley it has direct relation between them as a result traffic congestion appear. The traffic congestion reduces the productivity level of goods and services. Traffic congestion is the symbol of economic inefficiency. This research present estimation congestion cost. The process of estimation of congestion includes data collection to analysis of productivity time loss, excess fuel consumption, carbon dioxide emission, physical and mental stress and more. This study helps to convert all data to monetary value. Each elements of calculation method are explained and purposed based on the data and literature reviews.


Although it is debatable topic of economy. It is assumed that traffic congestion is the not a long run problem. Traffic congestion is the huge problems of developing countries like Nepal, Bangladesh, India, Sri Lanka. In Kathmandu valley it is the dangerous and unsolved problem. Congestion can take various forms but in Kathmandu valley there are two types of congestion can be noted. That is recurring and nonrecurring congestion. Recuring congestion means the traffic volume on the road is exceeds its capacity and the nonrecurring congestion means caused by unpredictable temporary events like accidents, road construction, unfavorable weather etc. The economy of Nepal is highly depending upon few cities, but the Kathmandu is the most. Price level increases in Kathmandu valley somewhat depends upon traffic congestion too. Most significant factors contribution to the problem is poor city planning, inappropriate public transport, inefficient traffic system etc. the demand of private automobiles and high uses of the vehicle is the root cause of traffic congestion in Kathmandu valley. Inappropriate public transport service level and undeveloped government transportation system causes private motorized transport share has increased. The government and public investment in road capacity improvement is not adequate and feasible on the against of growth of traffic volume in valley the result has been seen traffic congestion. Thus, it is important to estimate the economic value of traffic congestion of the valley context which will help policy making of central government and related local government (Kathmandu, Lalitpur and Bhaktapur) in resource allocation in road infrastructure investment.

              The traffic congestion cost elements and calculation method quite difficult so it is in estimated form. Cost of travel time delay imposes to users (passenger as well freight), cost of travel time unreliability in passenger transportation, cost of excess fuel consumption in vehicular transportation, the associate cost of CO-2 emissions due to excess fuel consumption, cost of physical and mental stress due to congestion. According to experts, in peak hour traffic flow average speed of Kathmandu valley is 14 km/hours and the normal time the average speed of traffic flow is 32 km/h whare as night average flow of traffic is 55 km/h. According to the department of transport and management 73 % of private vehicle increased in Kathmandu valley in last year. Last 10 years 400% private vehicle are increased.  50% of total vehicles increased only in Kathmandu valley. 120000 vehicles play on street of Kathmandu valley everyday half of these are two-wheeler. 4073-kilometer road is black topped out of 13,232 km road. In dry season dust and haze envelope the roads.

Nonrecurring traffic congestion found in Kathmandu valley especially traffic incidents, weather, fluctuations in demand, work zones, road construction, without notice road blockade, brokage of water supply, dumping construction materials on roadside, demonstrator/rally/activist/protester/strike on road, security check, random bus/minibus/microbus stop, random pedestrian crossing, special events, vehicle breakdown, traffic control devices, inadequate base capacity etc… The cost of each part calculating in different ways in term of monetary values.

Objectives of Research

This research aims to

  1. Conduct a literature search on direct and indirect cost of congestion in Kathmandu valley.
  2. Know about the estimation cost of congestion of upcoming years in Kathmandu valley.
  3. Know about additional time absorbed in delays caused by congestion and its economic cost calculation.
  4. Estimation of recurring congestion economic cost and concept through no of vehicles and road as well infrastructure too.
  5. Estimation of nonrecurring congestion in term of economic values or monetary values of additional cost such as depreciation of vehicle, additional fuel, repair and maintenance etc.…
  6. Estimation of the extra cost of production-based industries of Kathmandu valley causes of congestion.

Literature of Review

Research literature on economics of congestion in Kathmandu valley is rarely found. Research on economic cost of traffic congestion was carried out by few researchers using different methodologies. This paper presents a widespread review of the literature on measuring the economic costs of road traffic congestion. Research literature can be categorized according to data collection method. Collected data analysis based on the few benchmarks, these are traffic flow volume analysis, congestion level, traffic mixed distribution, field data analysis. The researcher has used description statistics of simple average to evaluate primary and secondary data.  

Research Design or Methodology

              Primary data was obtained from department of transport management and individual informant. Travel delays from recurring/nonrecurring traffic congestion is estimated by volume and speed. The calculation processor through the managed by expert’s method. The data are taken from direct authentic source via all types of research communication as well website too.

  1. Estimate the daily volume of vehicle (Normal, Peak and Night hours)
  2. Calculate peak period volume.
  3. Calculate daily vehicle travelled.
  4. Average speed of vehicles on different hours
  5. Estimate economic cost of free flow time and speed as well congestion time and speed.
  6. Estimate daily recurring vehicle hours.
  7. Calculating economic cost loss of carbon dioxide emission.
  8. Calculating economic cost of health impact in daily wise.
  9. Calculate volume to capacity ratio
  10. Calculate roadways design speed of vehicles.
  11. Calculate no of accidents
  12. Calculate Vehicles breakdowns
  13. Calculate security checks
  14. Calculate random mini/micro/truck/taxi/bus stops
  15. Calculate Random walker crossing
  16. Calculate delay of road construction
  17. Calculate without notice road blockade
  18. Calculate construction material dumping roadside
  19. Calculate activist, rally, demonstrate, protest on road

Research Finding

Salaries in Kathmandu range from 22,000 NPR per month (minimum salary) to 388,000 NPR per month (maximum average salary, actual maximum is higher). The average salary of Kathmandu valley is Rs. 3,70,000 which is Rs. 30,833 per month. If there is 25 days of working, then the average salary of day is Rs. 1233 which means Rs. 154 / hour assumed 8 hours a day. This research is based on the average salary of a person in Kathmandu valley.  These are the research topics and findings. The structure of Kathmandu valley is different than other cities. The research found that the various essential magnificent facts of traffic. Like traffic index, average walking time etc. the research helps to making policy to three layers government (Central, State and Local) to reduce traffic congestion of urban development plan, new city development plan, vehicle selling and renewable policy etc. it finds various facts for planning further in this field.

Traffic Index = 111.62

Time index (in minutes) = 37.16 minutes

Inefficiency index = 113.88

Average walking = 17.50 min

Waiting public vehicle time = 7.25 min

Overall travel in public vehicles = 49.17 min

Average driving car time = 35 min

Average riding motorbike time = 30.17 min (field-based work)

Average riding motorbike time = 15.67min

Travel time = 37.18 min

Distance = 8.94 km

Estimate Total Cost of Congestion

This is the reference table of traffic congestion effects of digital economics in Kathmandu valley.

TopicsDaily Cost (NPR)Yearly Cost (NPR)
Delay Cost24,680,0569,008,220,440
Excess Fuel Cost7,747,4702,827,826,550
Vehicle depreciation cost90,926,44433,188,152,000
Emission cost193,170,00070,507,050,000
Health cost560,005204,402,000
Excess traffic management cost521,077190,193,360
Excess cost of road maintenance985,600359,744,000
Accidental cost334,521122,100,000

                                                                                                                                                  NPR 120 = $1

Assumed that the average working hours = 8

then average cost of congestion per hour is NPR 39,865,647

Kathmandu Valley fuel Consumption Data

 The fuel consumption data of Kathmandu valley is surprising. 46%of patrol and 16% of diesel consumed in Kathmandu valley of total sales in Nepal. The given table is the mirror of fuel consumption in Kathmandu.

Fiscal yearPetrol in Kiloliters46% consumeDiesel in Kiloliters16% consumes

Kathmandu Valley no of Vehicle Data

No of new vehicle registration Bagmati Province

YearNo of vehicle

Accident of Kathmandu Valley Data

Annual Accidental Description

S.N.Fiscal YearNo. of AccidentFatalitySerious AccidentNormal Accident

Length of Road in Kathmandu valley

The road length of Kathmandu valley (Kathmandu, Lalitpur and Bhaktapur) is 13232km. there are three categories of road types, I. e. Black topped, graveled and muddy.

Types of roadKilometerPercentage
Black topped4,07330.78

Vehicle Trip Pattern of Kathmandu Valley

This vehicle trips are estimated data of 2019. Trip generation rate is average no of trip made by one person in a day in Kathmandu valley.

PurposeEstimated No of Trips 2019 bases on JICA reportPercentage
To Work1,110,81818.56
To School1,143,71519.1
To Home2,876,74648
To Business269,2304.5
All Total5,982,804100
Travel ModeEstimated No of TripsPercentage

Average trip length of motorcycle = 13.8 km

Average trip length of car = 17.7 km

Average trip length of Bus = 12.03 km

Average trip length of Bus =12 km

Average trip length of Taxi =20 km

Average trip length of others =10 km

Average trip length of walk = 1.4 km

Average no of passengers per vehicle

  1. Motorcycle = 1.1
  2. Car = 1.9
  3. Taxi = 2.3
  4. Buses (Micro, mini…) = 11.7
  5. Truck (light, Heavy…) = 1.9
  6. Total Average = 1.7

Revenue of Government from Renewable Process of Vehicles in Kathmandu Valley

OfficeKathmandu valley (all offices)
Small vehicle tax4,979,032,235
Road construction and maintenance tax5,306,826,738
License and vehicle permission tax979,017,931
Embossed plate tax19,568,194
Transportation area income186,956,715

Data      2017/18

Estimation of Time Delay Cost (One Day)

ParticularsTime DelayNoDelay hoursTotal Delay cost @154/h
General walker7 min (.116 hours)1,85,00021,460*13,304,840
Motorbikes21 min (.35 hours)1,55,00054,250 *1.19,189,950
Cars27 min (.45 hours)29,00013,050*1.93,818,430
Bus/minibus/microbus33 min (.55 hours)6,7003,685*11.76,639,633
Truck34 min (.566 hours)1,8001,019*1.9298,160
Taxi28 min (.466 hours)2,5001,165*2.3412,643
Others33 min (.55 hours)6, 0003,300*21,016,400

Calculation based on average income of an hour i. e. 154/h. and based on travel mode of one person. and average person per vehicle is given above.

Estimation of Excess Fuel Cost (One Day)

Types of VehicleNo of VehiclesFuel ConsumptionNormal fuel Consumption without CongestionExcess fuel In literTotal Cost @110 & 90
Motorbikes1,55,00082,27053,475       28,7953,167,450
Others12, 00017,14412,0005,144514,400

 Calculation is based on the average milage of two-wheeler is 26 KM/L, car 8 km/l, bus, truck 3.6 km/l,

Whare as without congestion it is assumed that two-wheeler 40km/l, car 12km/l, bus, truck 5km/l

Formula for fuel consumption = Vehicle no * km traveled/milage

Estimation of Emission Cost

The cost of carbon pollution is very hard to calculate in term of flooding, deadly storms, spread of disease, food insecurity, other may types of disaster. The Global share of Nepal is 0.027%. The Kathmandu valley CO2 emission is 7.23 million ton every year.  38.7% of it from transport. Which is equal to 27980100 tons. Based on traffic congestion data 42% of CO2 emission of transport due to congestion which is 11751642. According to IMF data carbon cost of per ton is $50 which is equivalent to NPR 6000.

Extra CO2 emission of transport in Kathmandu valley.

Time periodQuantityEstimated rate /tonTotal
Estimation – 2022/day37,2706000223,620,000

Data based on 2019

Estimation of Vehicle Depreciation Cost

Kathmandu valley registered vehicle and its estimated depreciation

Types of vehicleNo of vehicle (Good condition)Average value of vehicleActual depreciation costNormal depreciation cost without congestionExcess depreciation cost (4%)
Car, Minibus, Bus, Truck, etc.237,5793,000,00024%20%28,509,480,000

Estimation of Health Problem Cost

It is calculated based on patient which affected by air pollution and traffic congestion-based effects in health. It is calculated on Kathmandu valley. Annual flow of patient is 2838912 and 6% out of them is suffering caused by traffic congestions affects.

Actual yearly PatientNormal Patient (without Congestion)Excess PatientAverage Cost per PatientExcess Patient Cost

Health care index= 56.76

Health care system index = 57.94 (System satisfaction)

Health care expenses index = 99.44

Estimation excess traffic management manpower cost

Kathmandu traffic police have only one mission that is “Safe, dignified, systematic and technological vehicle management in Kathmandu Valley” and its values and beliefs are – Strictness in law enforcement, conduct, and politeness in practice, Priority in road safety, need for public awareness, Pollution-free and technological traffic management, The efforts of the concerned bodies, the practice of traffic rules. But in Kathmandu valley there are 1084 posting of traffic police. Which is quite more for such a Kathmandu valley if there is no congestion.

Actual ManpowerNormal Manpower (without Congestion)Excess ManpowerAverage Salary of Manpower/monthExcess Manpower Cost

Daily excess cost = NPR 5,21,077

Yearly excess cost = NPR 19,01,93,360

Estimation of excess cost of road maintenance

Including electricity manpower, telecommunication manpower, water supply manpower, sanitary management manpower, cable management manpower and such others directly related with road congestion. There is no environment of maintenance in daytime as well night too.

Actual Time/DayNormal Time (without Congestion)Excess Time/DAverage Salary of ManpowerExcess Cost /Day
1800*8 =14,400 hours1000*8 = 80006400154985,600

Annual accidental cost

The annual accident cost calculated on the government average paying rate. The data is in annually, so the calculation amount is in year.

Types of accidentNoDue to traffic congestionGovernment average rateTotal

Data              2019/20

Photos of Kathmandu valley congestion sides


Jayasoorya and Bandara 2017, A research paper on ‘Measuring the economic cost of traffic congestion’ – University of Moratuwa, Sri Lanka.

Neema Davis 2015, ‘Congestion costs incurred on Indian roads: A case study for New Delhi – Indian Institutes of Technology Madras, India.

Cairo Traffic congestion Study, Final report 2011, ‘Estimation of direct economic cost of traffic congestion in Cairo

Allan G. Bluman 2018, Elementary Statistics – A step by step approach, 7nd Edition, Boston, Mc Graw Hill.

website of Central Bureau of Statistics of Nepal

website of Ministry of Health and Population of Nepal

website of Traffic Police of Nepal

website of Health Office Kathmandu, Nepal

website of Ministry of Education and Science and Technology, Nepal

websites of Departments of Roads, Nepal

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