Fentale Irrigation Based Integrated Development (FIBID) project, designed to irrigatern18,000 ha and currently supplying irrigation water for 4000 hafor areas which phiscalrnstructures are constructed. The project has passed from 2-6 irrigation seasons atrndifferent irrigation blocks based on the completion of farm irrigation water supplyingrnstructures and land distribution. Even if there are high positive impacts at the earlyrnstages challenges on the irrigation management and sustainability are sprouting. In thisrnstudy, the scheme is assessed against Uphoff three dimensional irrigation concept ilrnPhysical structure iii Water use iiil Organizational management. In addition criticalrnenvironmental conc&rn of the project area is identified. Primary & secondary datarnthrough questioner from sample respondents, FGD, Key informants, waterrnmeasurement and GPS were collected. These data were analyzed using SPSS, Irrigationrnpeliormance indicator, GIS & VSTM. As a result, the research identified and witnessedrnthe request for the project and public consultation conducted at the commencement ofrnproject contributed much to the relevancy and the need of the project. The project isrntransforming the life of some beneficiaries. Contrary to this, in this study, waterrnmanagement limitations in terms of efficiency and effectiveness, weak irrigationrninstitutions at all stages Government, public & IWUC which are working against thernpositive impact were observed. Inconsistent water distribution, challenges on how tornmanage and operate the field level plots and structures flaws are becoming therncharacteristics of the scheme. The water loss in the scheme is leading and enhancingrncritical environmental concern -water, land and salinity- which can exacerbate thernearly positive impact of the project. Livestock development in the project, cattle troughrnand modern forage production were not given due emphasis. The parallel approach,rnDesign and construction, is quoted as one of the reason for limitations on the qualityrnand endanger the environment without giving room for environmental impactrnassessment. The cost recovelY concept which started to play great role in the irrigationrnmanagement lost its rate of collection due to unconvincing reasons.rn(Key words: Irrigation physical system, Parallel approach, water use, organizationalrnmanagement)