Georgia: BTC Pipeline-10/Tetritskaro
$125 million (A loan) $125 million (B loan)
The Baku-Tbilisi-Ceyhan (BTC) oil and gas pipeline is a 1,768 km long crude oil pipeline stretching from the Caspian Sea to the Mediterranean Sea. It is the second longest oil pipeline in the world and passes through Azerbaijan, Georgia and Turkey. IFC has invested $250 million since 2003 and the total project cost is approximately $3.6 billion. The project is operated by BTC Co., which comprises a consortium of 11 partners. To date, CAO has received 33 complaints in relation to the project ranging from individuals to communities to local organizations. In May 2004, the CAO received seven complaints related to the BTC pipeline project in Georgia, filed by a Georgian NGO named Green Alternative on behalf of affected residents. Among the complaints was a claim from residents in TetriTskaro, who alleged that explosions undertaken as part of pipeline construction were responsible for cracking the walls of village buildings. The complainants further alleged that these explosions were carried out without first alerting local authorities or residents.
CAO accepted the complaint for further assessment on June 8, 2004, and released an assessment report in September 2004. As a result of a number of other villages along the pipeline route filing similar complaints related to construction vibration, CAO included the TetriTskaro case in a collective assessment of vibration-related complaints. In response to the collection of vibration-related complaints, CAO recommended an independent study to assess whether vibration from blasting and construction traffic may have caused damage to the claimants’ buildings. In August 2005, BTC Co. commissioned an independent study. The study concluded that blasting-induced stress of the order recorded in the independent testing was unlikely to have caused cracking on its own, but could have contributed to the superficial cracking observed in TetriTskaro claimants’ homes. BTC Co. committed to undertake further ‘drop’ testing, which it carried out in April 2006, and to compensate appropriately if results indicated culpability.
In December 2006, BTC Co. released results of the independent ‘drop’ testing carried out in TetriTskaro to CAO. In a statement accompanying release of the final report, BTC Co. explained that the findings of the structural surveys, which found no fundamental difference in the form or severity of cracking between houses closest to the pipeline and those approximately 100m away, support BTC’s position that it is unlikely vibration from blasting contributed to damage in nearby houses. However, because BTC could not conclusively rule out the possibility that vibration from blasting activities did not contribute to cosmetic cracking of houses within 188m of blasting locations, they made an offer to residents inside this proximity of a one-time payment of 1,500 GEL (approximately US$830). Residents who accepted BTC’s offer were asked to sign a waiver accepting it as full and final closure of the complaint. The offer was extended to 16 property owners. CAO confirmed with the complainants their understanding of the offer, and closed the complaint in January 2007.