Expansive soils are soils that have a property of large volumetric changes, both shrinkage andrnswell, due to variations in their moisture content. Their bearing capacity is poor. For road tornbe constructed on such soils, the subgrade should be designed to minimize subsequentrnchanges in moisture content and consequent volume changes thereby improving bearingrncapacity of the soil.rnThe subgrade material for road construction within the project of Gambella-Alwero-Rice-rnProject, located in Gambella National Regional State - Abobo Wereda, is highly dominatedrnwith such type of expansive soils.rnMethods applied to improve the engineering property of such soil were either to stabilize thernexisting soil or to replace the soil with nonexpansive impermeable soil to the depth affectedrnby seasonal moisture changes.rnThe decision on which method should be used was made based on cost-benefit analysis ofrnstabilizing versus replacing for the existing expansive soil.rnTo come up with the cost-benefit result, initially expansive soil samples from different roadrnsection were taken. Quality test for the collected soil samples have been made in thernlaboratory. The laboratory test result has indicated as the existing expansive soil needsrnimprovement to serve as subgrade for the road within the project.rnFollowing the test result, selection of relevant replacing material and stabilizing agent wasrndone. Replacing material within 2km radius was found satisfying all tests and lime wasrnselected as stabilizing agent. With those selected materials and stabilizing agent, cost-benefitrnanalysis was carried out. Total Cost of Replacing the existing expansive soil with locallyrnavailable suitable material was found to be 2,862,247.71 (Birr/Km) and total cost ofrnstabilizing the existing expansive soil with Lime from Derba Cement Factory was found to bern1,974,821.28 (Birr/Km) amounting to a saving cost of 32%.rnFrom the study, the result of stabilizing the existing expansive soil as compared to replacingrnwith non-expansive soil from the nearby forest has become economical