Daily traffic chaos in Malta is a clear example of market failure, a situation where the private interests of individuals are resulting in undesirable effects which are impacting negatively the rest of the population. The situation has worsened so much that previously unthinkable solutions are called for. The country has reached a point where shock therapy economic policies are needed. The country’s standard of living and growth prospects could be seriously undermined if the traffic problem is not immediately addressed.
Time wasted in traffic has a direct effect on the level of stress as well as on the level of productivity. A conservative estimate would place the daily cost at around €0.8 million per day. This is based on the assumptions that the gainfully occupied population – over 162,000 people – waste half an hour a day in traffic (50/50 resulting in lower output because of late arrival at work and in foregone leisure time), using the hourly cost estimates for working and non-working time (from a study on commuting costs in Malta), respectively at €15.07 per hour and €4.61 per hour.
Traffic is a situation where the demand for road usage exceeds the road network supply. In recent years demand for road usage increased at a very rapid pace while the road supply network failed to keep up. To rebalance the situation, we need a holistic approach aimed primarily at reducing demand.
Public transport should be incentivised to shift demand away from private car use. This requires a high level of investment in good and efficient buses, as well as other modes of transport, such as by sea or monorail. Most people would not dream of driving through London, so imagining a situation where public transport is the main mode should not be a heresy
Since the country is already heavily built up, expanding the number of roads would only destroy further the little remaining greenery. There is a limited possibility to boost supply by introducing flyovers at key strategic junctions, such as the notorious Marsa, Kappara and Lija roundabouts. Activities which reduce the supply of roads, such as temporary road closures because of private works, should also entail a high price tag with a clear time limit. Moreover, as a general policy, non-urgent maintenance works should be carried out at night rather than during the day. This will inevitably raise costs but will achieve cost savings in terms of less time lost because of traffic delays.
Car usage can only be drastically reduced if the cost of owning a car is significantly increased. Fiscal measures are necessary to make the use of private transport significantly less attractive than at present. There are various options, ranging from the possibility of introducing a higher VAT rate on car purchases to scaling up car licences according to annual kilometres driven.
Car-pooling should also be encouraged. This can be achieved if the concept of free parking is abolished, perhaps through the introduction of parking meters across the whole country. This system could be fine-tuned according to the locality and the time of the day. Other options include the possibility of zone access fees and higher charges for driving tests.
On the other hand, public transport should be incentivised to shift demand away from private car use. This requires a high level of investment in good and efficient buses, as well as other modes of transport, such as by sea or monorail. Most people would not dream of driving through London, so imagining a situation where public transport is the main mode should not be a heresy.
Traffic resulting from the intense use of the road network at specific periods can be tackled through more balanced use. One possibility could be to prohibit the use of heavy vehicles during rush hour. A more creative solution could entail a rethinking of working times. In an age where so many services can be provided over the internet, there is much less need for everyone to start working at the same time!
Another long term solution worth exploring is to decentralise commercial and administrative activities. Businesses should be encouraged to set up shop or relocate to less congested areas. This can be done by, for example, introducing an annual location tax. Areas which normally attract huge traffic can face such taxes while other towns could remain tax free. On a similar note, government departments need not be concentrated in the Valletta area.
The naïve might challenge these suggestions as being too radical. In reality the economy is already facing huge costs because of traffic problems. Just like the best seller book Freakonomics has shown, economic principles can be used to understand and deal with practically all aspects of human life, including finding a solution to the traffic problem in Malta.