Construction of road and rail projects to enhance social and economic activities of the country.rnThe number of road and rail construction projects in the country increasing time to time. Thesernconstruction projects achieve or failure of objectives measured by whether successfully completedrnon time and cost or not. However, most of federal road and rail construction projects in the countryrnexposed to time and cost overruns. It becomes difficult to complete projects on schedule andrnallocated budget. To fill the gap, the study on causes of time and cost overrun was conducted.rnQuestionnaire surveys together with project completion report were used. A total of 73 questionnairesrnfrom owner, consultants and contractors were collected and secondary data of 30 (25rnroads and 5 rails) construction projects completed since 2014 in federal road and rail agenciesrnwere investigated. From the analysis it was found that 88% of road and 100% rail constructionrnprojects suffered time performance, and 80% of road and 100% of rail projects also cost overruns.rnThe key time and cost overrun determinants ranked by respondents conducted through questionnairernand interview managers and engineers who have experience of delay constructionrnprojects from clients, contractors and consultants in purposive sampling method. From these identifiedrnand ranked 38 determinants five top extension of time and 4 escalation of cost are selectedrnfor discussion. Factors which affected time performance were: incomplete study prior to projectrnapproval, poor project management and coordination, right of way issues, inaccurate forecastingrnof schedule, overconfidence and interest of project stakeholders. Whereas the extremely significantrnfactors affecting cost performance were; inflation of material cost, scope change with changernorder, incomplete study project approval, poor bill of quantity and design, and poor project performancernmonitoring. Cost and time overruns of Federal road and rail projects have affected keyrnstakeholders in particularly and on the economy of the country generally. Time and cost overrunrnadded in estimated time and cost over and above initial agreed upon on set, this damages clientrnand contractor reputation, loss of profit and investment opportunities, inability to deliver value ofrnmoney and inefficient use of time, disposing business activities and create burden for taxpayers.rnThis paper finally came up with solutions towards reducing the impact of delays and cost overrunsrnon federal road and rail projects in Ethiopia.