Large-scale water infrastructure across the East African Rift System faces severe structural degradation and capacity underutilization driven by coupled hydro-geotechnical failures. This study presents a forensic engineering investigation into post-construction left-rim reservoir seepage bypass, rock-slope instabilities, and spillway design and construction deficits at the multi-purpose Gerebsegen Dam in northern Ethiopia, positioning the findings within the macro-regional discourse on East African dam safety paradigms. Engineered with a 30-year design period to provide municipal water to Mekelle city and irrigation purposes, the project exhibits a critical discrepancy between chronological age and operational efficiency. Although 12 years have elapsed since construction, the reservoir utilizes only 20% of its design storage volume. This deficit has neutralized two of the system’s three pressure conduit outlets, completely abandoning the 500-hectare irrigation supply and a secondary 250 lit/sec municipal line. Consequently, operational yield is restricted to the primary municipal pipe, which delivers only 150 lit/sec due to severe pump downtime despite a 250 lit/sec design capacity. To isolate the root failure causes, geotechnical site characterization and a hydrogeological mass-balance model were deployed. Geotechnical investigations using core drilling and Electrical Resistivity Tomography (ERT) revealed that the reservoir’s left abutment rim is heavily fractured by tectonic joint networks and cross-cut by highly permeable, weathered dolerite intrusions. This deficient geological boundary condition permitted high hydraulic gradients to drive a massive lateral subsurface short-circuiting seepage bypass of 568 lit/sec out of the storage basin. Crucially, this structural bypass is continually masked by a perennial upstream river baseflow contribution of 372 lit/sec, resulting in a net observed reservoir drawdown rate of approximately 373 lit/sec. Furthermore, kinematic slope stability assessments identified severe structural vulnerabilities along the reservoir rim and spillway chute channels, where excavated rock slopes are cut at unstable, near-vertical angles of 75° to 80°, and triggering block failures. Hydraulic reassessments also confirmed that the existing spillway is significantly under-poor construction, failing safely to pass extreme peak flood discharges. These findings establish a vital diagnostic workflow and highlight the necessity of coupling rock-mass slope forensics with hydrogeological mass-balance modeling to design resilient abutment cutoff systems in fractured rifts. To mitigate these structural risks, a regional-standard remedial engineering package is evaluated, featuring a structural replacement with a rigid, tapered cantilever reinforced concrete structure up to 7.20 m high, a 1,700.50 m3 upper-slope offloading excavation to a stable 45° profile, and a subsurface pressure-grouting curtain.