The thesis paper focused on the water supply system of Welkite town, capital city of Gurage zone of Southern Nation Nationality People Regional State of Ethiopia.rnThe main objectives of this study is to identify the problems of Welkite water supply system by assessing, bursting and leakage problem of the pipe system, evaluate and compare the total demand and supply and to suggest some remedial measure.rnThe demand and supply coverage was evaluated depend on different supply level and the level of leakage evaluated as per the amount of production and consumption.rnMoreover, to analyze the existing water distribution system, a model was developed by using Water CAD software. The model can be used to identify the zone of high pressure and low pressure in junctions and the level of velocity through pipe. In addition, sample pressure filed data used to compare with the simulated value.rnThe model run was performed for average, maximum, peak and low demand scenarios to analyze the system model.rnThe analysis result shows the domestic and non-domestic water supply coverage of the town is 52%. Hence, this result indicates that there is high gap between demand and supply. In addition, from three years obtain data of production and consumption the average loss become 19.27%.rnFurthermore, the model analysis result shows that different problems of the system. These are aged pipes, oversized and undersized pipes, high pressures and low pressure. Hence, the maximum pressure occurred at gravity main pipe line in night demand is 284.78m which is above the recommended value and the reason of pipe burst at gravity main pipe line.rnTo handle the problems need providing additional pump to increase the production, rehabilitate the existing bore hole, maximizing the capacity of distribution pipe line and providing separate pipe line for rural community. Moreover, As for bursting of pipe, suitable anchoring, treating the system by using quality joints, changing pipe in same critical points and fixing air release valves should be done.rnKey Words: Water Cad Model, Non-revenue Water and Calibration.