The present paper describes a framework for the evaluation of a drainage system’s capacity in order to get a better understanding of the interactions between three rehabilitation measures: the Upgrading of Pipes (UP), Distributed Storage (DS) and the combination of both (UP+DS). It is posed as a multi-objective optimisation problem with the aim of minimising rehabilitation costs and flood damage. The approach of Expected Annual Damage Cost (EADC) was also introduced as the probabilistic cost caused by floods for a number of probable flood events (i.e. the accumulation of damage during a timeframe). The study combines computational tools such as a 1D/2D flood inundation model and an optimisation engine in the loop to compute potential damages for different rainfall events and to optimise combinations of rehabilitation measures. The advantages of this approach are demonstrated on a real-life case study in Dhaka City, Bangladesh. The optimal solutions confirm the usefulness and effectiveness of the proposed approach where both rehabilitation and damage costs are reduced by the optimal implementation of the UP and DS measures. In addition, the results of the proposed EADC approach indicate a damage cost reduction of at least 56% by implementing UP and of 27% by implementing DS, and both measures have lower rehabilitation costs. The proposed approach can be found appealing to water/wastewater utilities who are often challenged to achieve optimal design and rehabilitation of urban drainage systems.