ARARSA BEKELE KILISA2026-02-132021-10-14https://etd.hu.edu.et/handle/123456789/763Roads are the dominant mode of transportation in Ethiopia but it has been neglected to a large extent in the past, Socio-economic development and subsequent economic growth on the country is hampered by several limiting factors, including the lack of adequate roads infrastructure. Investment in transport infrastructure plays a significant role in stimulating development. An increased interest in rural roads investment potential has developed in recent years. This is mainly due to the need for development of rural as well as the positive impact that road investment could generate on rural communities, should they have an adequate support roads infrastructure network that is sustained over the long term. Due to improvement in transportation network, reduction in transportation costs can be realized in numerous ways, such as reduction in travel time, decrease in vehicle operating costs, increased safety and reduction in the level of air and noise pollution. In addition to reduction in transportation cost, it also increase comfort to passengers and also enhancing land value. Economic analysis is a critical component of a comprehensive project evaluation methodology that considers all key quantitative and qualitative impacts of road. The scope of present study consists of evaluating the impact on rural road investment and checking economic viability of the project. Maintaining and upgrading for two lanes with gravel shoulder of flexible pavement road namely, Tulla Kenera Yaye Section of TKY is taken as a case study. In spite of heavy initial investment in maintaining and upgrading to two lane with gravel shoulder of flexible pavement, economic analysis carried out using HDM-IV and RED model results indicates that there is great saving towards Vehicle Operating cost (VOC) and Travel Time cost (TTC) after maintenance. The paper also indicates the benefits of rural road investments as well as the type of mechanisms used in practice to estimate its impactenroad sector developmentsocio-economic growthagricultural productionsocial servicemarket accessRED model and HDM -4 modelThesis