LUXEMBOURG (AFP) - Luxembourg will become the first country in the world on Saturday (Feb 29) to offer a free public transport system as the government tries to reduce particularly dense car traffic.

Some cities have already taken similar partial measures but the transport ministry said it was the first time such a decision would cover an entire country.

The free transport, which is being flagged as "an important social measure", will affect approximately 40 per cent of households and is likely to save each one around €100 (S$153) per year.

The measure is part of a plan intended to reduce congestion.

Private cars are the most used means of transport in the Grand Duchy. According to a 2018 survey by TNS Ilres, cars accounted for 47 per cent of business travel and 71 per cent of leisure transport.

The bus is used for only 32 per cent of trips to work ahead of the train, which accounts for just 19 per cent.

In Paris, by way of contrast, 68.6 per cent of workers use public transport, according to Insee, the French statistics institute.

The capital city of Luxembourg, where a tram system has been under construction for some years, is notoriously bad for traffic jams.

The first section of the tram network has been operational since the end of 2017 but work will continue for a few more years to link the southern outskirts of the capital to the north, where the airport is located.

"Systematic and continuous investment is a sine qua non (essential) condition for promoting the attractiveness of public transport," said Transport Minister Francois Bausch.

Sales from the existing €2 euro amount to €41 million a year, which, according to the authorities, represented just 8 per cent of the annual budget of €500 million. This will now be met by the Treasury.

The exception to the free-for-all rule will be first-class travel on trains and certain night bus services.