This study evaluated the effects of drain spacing and locally available granular envelope materials (pumice and red ash) on groundwater table depth, drain discharge and economic viability in a subsurface drainage system implemented at the Metehara irrigation scheme. A fractional factorial design was applied, testing three drain spacings (12.5, 25 and 50 m) and three envelope conditions (pumice, red ash and no envelope). The results revealed that narrower drain spacing significantly lowered the groundwater table depth (p < 0.05), while envelope materials also enhanced drainage performance, with pumice showing the greatest efficacy due to its coarse texture and high porosity. Although neither spacing nor filter materials significantly affected drain discharge (p > 0.05), variations in discharge rates were observed across treatments. The entrance resistance remained within acceptable limits across all configurations, indicating satisfactory drain performance. Economic analysis favoured wider drain spacing (50 m) due to substantially lower annual costs and higher benefit-cost ratios, especially under moderate to high net benefit scenarios. Overall, the use of pumice and red ash as cost-effective, locally available filter materials, combined with optimal drain spacing, provides a viable solution for managing waterlogging and salinity in semi-arid agricultural systems.