The growing Population and Economy of Ethiopia require efficient transport system. However,rnthe country's transport infrastructure with the exception of air transport is not developed; thernCountry has poor road and rail transport network and density, one of the least in Africa, withrnmany challenges; financial, maintenance, professionals, and management problems. rnRail transport which started operations in 1901 is pioneer in the country; however, its faternseems unfortunate. The road transport system has relatively better technological andrnprofessional advancement. Despite the past shortcomings of railway transport, the Country hasrnnow formulated an ambitious plan to develop a new railway network system with a length ofrn5,000 km. rnThis paper tries to fill the gap in the railway system planning and modelling unlike the country'srnroad transport; it is not developed but rather diminished and has not established workingrnmanuals and standards. There have also been planning and management problems and as arnresult, the previous Ethio-Djibouti Railway Company suffered huge losses in traffic and financernand eventually was forced to quit operations. rnThe Direct Demand Model which is developed in this research is simple and can produce trafficrndemand on single computation. It was, selected and analysed with variables of: economy,rnpopulation, travel distance and time, load capacity, environment, topography, energy, andrnother variables (price, income, logistics, travel culture/behaviour, urbanisation,rnmultimodal/intermodal, technology, information communication technology(ICT), transportrndemand management (TDM), and season etc); the model produced a 58/42 and 55/45 FREIGHTrnand PASSENGER modal split for the year 2020; the result agrees with the AAU 2011 study ofrn60/40 Modal Split. In addition the model validated for road freight with Pearson Coefficientr=0.98rnandrnrrn2rn = 0.96. rnThe observation of Ethio-Djibouti rail line exhibits: a decline of rolling stocks and traffic withrnloss in its revenue. This research has produced model from investment and strategic plan viewrnof land transport.