Risk management of construction projects is increasingly felt critical to the success of projects inrngeneral and large projects in particular. Addis Ababa Light Rail Transit project is a large andrncomplex project involving the construction of civil works and assembly of considerablernelectromechanical components. The project is undertaken through EPC Turnkey Contract. Arnresearch proposal was prepared to identify the risks that may thwart the success of this flagshiprnProject of the city. Assessing the project risk management practice was also of prime concern.rnIn order to understand the theoretical background, the research embarked upon intensivernliterature survey. Archival records including contract documents, reports, and correspondencesrnwere investigated. Questionnaires were distributed to respondents from the Employer and thernEmployerâ€™s representative. To supplement the low population of respondents and to furtherrnrefine the responses, interviews were carried out with selected professionals involved in thernproject.rnThe findings have shown that the project is exposed to the vagaries of various risks. These risksrnhave the tendency of severely affecting one or more of the project objectives and even the widerrnpublic as well. Despite of this risk prevalence, the Employer has not instituted formal riskrnmanagement system. The method of risk management is not structured and process oriented. Thernterm risk itself is not also properly understood and the conventional practice of managing risksrnhas wider departures from the internationally accepted practice.rnFurthermore, the research has given evidence that the way risk identification, analysis andrntreatment methods are handled is unsatisfactory. From among the three steps of riskrnmanagement, risk analysis is the least practiced. Risk treatments are addressed through contractrnprovisions by way of insurance and bonds.rnAlthough the contract document clearly allocates risks to both the Employer and the Contractorrnin acceptable manner, most respondents replied that the contractor carries most of the risks.rnThis entails that most of the respondents have no detailed understanding of the contract clausesrnthat specifically dwell on risk allocation.