The previous researchers indicate that cost of equipment in civil engineering projects varies from 25 to 40% of the total cost of the project. Inadequate management practices of construction equipment and the subjective decisions on equipment leads to a major loss in the construction industry. Therefore, effective equipment management practices not only increase production time and equipment availability, but also maximize the company profit by reducing several costs. Practically in Amhara Water Works Construction Enterprise annual report, the cost of heavy equipment covers 40% up to 60% of annual project costs. The annual report and observation indicates that heavy construction equipment management is a main problem in organization. Therefore, the main objective of the thesis is to determine the effect of heavy equipment management on the performance of irrigation projects in Amhara Water Works Construction Enterprise. With this in mind to determine effect of construction equipment management, assess the current equipment management practice, equipment management problems and its cause, effects of equipment management problems and equipment management framework in enterprise. The methods of data collection for the study are questionnaire, case study, document review and interview. The collected data would analyzed by using excel and SPSS software. Mixed data approach is used to analyze this research. The study results indicate that heavy construction equipment management practice in Amhara water works construction enterprise is weak and hasn‟t well-organized written management policy and strategy. Non-availability of spare parts, non-availability of adequate maintenance facilities and poor equipment maintenance practices before damage are the top three equipment management problems. Poor performance of spare part dealers, motivation of operator and technicians and costs to obtain spare parts are the three top causes of equipment management problems. The production loss in projects vary from 62.8% to 80.7% of monthly output per equipment, loss in cost vary from 43.5% to 53.3% from monthly running cost per equipment and loss in time would run from 35% to 80.7% of monthly working day/equipment. Key words: Heavy construction equipment, construction equipment management, framework, effect.