This thesis uses transient and contingency analysis to investigate operating conditions of Ethiopian high voltage power system and evaluate the impact of contingencies, results from manual or fault cases, on its operational status at the available load peak demand. Critical Clearing Time (CCT) is the largest possible time for which a power system is allowed to remain in fault condition without losing stability. Appropriate CCTs settings of protective equipment on power system greatly determine the reliability of power supply. The determination of the critical clearing time for a particular fault condition has long been a difficult problem for both the long and short range system analyst operations analyst. The classical equal area technique and other techniques which require network reduction and admittance matrix calculations have generally proved to be cumbersome and time consuming both in manpower and computer computation time. This thesis developed a simplified technique which will serve as a tool for system analysts to determine this important factor, determines the CCTs for all the critical buses in the Ethiopian high voltage transmission system. The transient stability analysis (TSA) system adopted uses network simulations method approach using the DIgSILNET power factory simulating software. This software is very helpful in determining critical clearing times for circuit breaker, voltage level of systems and transfer capability between systems. The other part of this thesis deals with the security assessment or contingency analysis for single time-phase contingency analysis. The deterministic assessment of failure effects under contingencies caused by loss of a transmission line within a single period is also analyzed. It appears from the swing curves that the critical fault clearing time lies between 0.0464 and 2.4 sec for the three phase short circuit bus and transmission line faults. The critical clearing time is very small for the faults occurred near to large generating units (0.056 sec for faults at bus Gigel Gibe III and 0.0464 sec for faults at transmission line Welayta Sodo-Gigel Gibe III), and large, relatively, for farther fault locations from this large unit.It is believed that the determination of appropriate CCTs and effects of critical line outages for the Ethiopian power system will enhance the operation of the power system by limiting effects of faults and contingencies, respectively, on the power system.