In rapidly developing cities automobile ownerships and their utilization isrnincreasing and accordingly the problem of traffic congestions quickly go fromrnbad to worse. It is, therefore, necessary for these cities to construct and operaterna transit system. The basic question that must be addressed in formulating anrnurban transport strategy for a given city is to decide on the type of publicrntransit suited for the city.rnLight rail transit is seen as a better choice for the cities than busways, perhapsrnbecause of their lack of image and knowledge of what is achievable using busbasedrnsystem. This document is a research product on comparative study of thernAddis Ababa City Light Railway project and an equivalent Bus Rapid Transitrn(BRT) system. That is defined as a high quality bus-based transit system thatrndelivers fast, comfortable and cost-effective urban mobility through thernprovision of segregated right-of-way infrastructure. The research is conductedrnto show whether or not the bus-based systemâ€™s effectiveness and economicrnworth as compared to Light rail transit.rnAfter examining the light rail and its equivalent BRT system in terms ofrnperformance, cost and impact, the research found out that the BRT system hasrncapacity, commercial speed and quality of service which is not less than to thernLRT system. Moreover, due to low cost and flexibility of BRT system they canrncover more area and reduce or remove more small cars from street than LRTrncan do thereby reducing emission as compared to LRT.rnThe results of economic analysis show net present value of Birr -170 million,rnbenefit-cost ration of 0.965, Internal rate of return of 9.45 % and more than 30rnyears payback period for LRT system, In case of BRT system; net present valuernof ETB 2.54 billion, benefit-cost ratio of 2.15, Internal rate of return of 27.4%rnand payback period of eighth years were calculated. Thus the BRT system givesrnmaximum befit to the society for investment, due to low investment cost andrnshortage of implementation time, utilization of the existing infrastructures forrnthe city which needs immediate solution to urban transport problems and easernof operation, construction, design with limited amount of budget. Therefore, thernBRT system is a better transport option for the commuters in Addis Ababa.