Georgia: BTC Pipeline-17/Tadzrisi
Residents of Tadzrisi
$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. On December 10, 2004, the CAO received a complaint from residents alleging that pipeline construction traffic caused buildings to crack and other nuisances.
The CAO accepted the complaint on February 8, 2005. As a result of a number of other villages along the pipeline route filing similar complaints related to construction vibration, CAO included the Tadzrisi 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 although there were shortcomings in the adequacy of the traffic vibration monitoring when compared with international standards, construction traffic was unlikely to have caused the cracking to residents’ buildings. During a follow-up visit to the region in February 2006, CAO facilitated an agreement between BTC Co. and Tadzrisi residents stating that BTC Co. would return to the area to conduct further measures. Cracks in homes along the right-of-way would be measured and compared with cracks in homes farther away from the right-of-way. BTC Co. agreed to compensate only if cracks closer to the right-of-way were found to be larger than those farther away. The complainants committed to accept as binding the outcome of these tests and to drop their complaint if the tests confirmed that there were no differences in the size of the cracks. The parties agreed that an independent engineer would conduct the comparative study.
In September 2006, BTC Co. released the independent engineer’s final report on Tadzrisi house cracking (dated July 2006), which concluded that overall there was no evidence to support that vibration from construction activities on the right-of-way exacerbated or caused the observed cracking in the houses close to the right-of-way. Russian versions of the report were delivered to residents, and CAO closed the complaint in December 2006.