Failure of the Mtera-Kidatu Reservoir System within the Rufiji River Basin in Tanzania in the early 1990s isinvestigated by considering four possible causes (i.e. sudden decrease in inflows, sudden increase in losses,sudden increase in hydropower generation or unnecessary spills; or a combination of these) and it wasfound out that unaccounted spillage seems to be the main cause. Consequently, the system’s simulationmodel has been proposed in this paper that takes into consideration the flows that are generated in theintervening catchment (i.e. catchment between Mtera and Kidatu) with the operational policy that maximumpower is produced at Kidatu most of the time because Kidatu has higher head for greater power generationthan at Mtera. The paper shows that if this proposed model had been in place then the Mtera Reservoirshould not have gone dry in the 1991-1994 period. The validity of the proposed model is tested with theTALSIM 2.0 Model and the regression analysis of the water levels at Mtera Reservoir produced by themodels had an efficiency of 95%, indicating a very good correlation.The proposed model operates the reservoir system in an integrated manner by considering the flows into theMtera Reservoir as well as accounting for the flows generated by the intervening catchment.