Tbilisi railway bypass poses expropriation risks
04 November, 2010
Tbilisi railway bypass poses expropriation risks

Resettlement procedures carried out within the framework of Tbilisi Railway Bypass project seems unfair and non-transparent. Proprietors affected by the resettlement process claim the state offers much less than the market price for the negotiated lands that do not comply with the international standards.
To discharge the city of environment-related problems and noise as well as make railway transportation more comfortable, Georgian Railway LLC, the state owned enterprise, is developing Tbilisi Railway Bypass project. EUR 290 - million-worth project aims

to construct a new railway route bypassing the central area of the city and is co-financed by the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) as each donates EUR 100 million to the project.
The project was launched in this past summer and is scheduled to be completed in three years. The bypass project is supposed to enhance the integrity of the separated parts of the city [divided by central rail-truck at the moment] and reduce the environmental and traffic problems, as well as improve the safety and efficiency of railway operations. And resettlement of population residing within the construction-spot encompassing 125 hectares is necessary.  50 hectares out of the figure is private land and 75 is municipal or state land. 42 hectares of the 50 hectares of private land are agricultural. Most land appears not to be registered. Subject to minor adjustments in the route to avoid dwellings, it is currently estimated that 50 to 75 residential houses and about 20 businesses would be affected.
Participation of international financial giants like EBRD and EIB was guarantee that the resettlement procedures would be implemented fairly in full compliance with the international law requiring protection of human rights during the resettlement procedures.

According to Georgian Railway web-site, any compensation and resettlement activities should be carried out in compliance with Georgian law and EBRD’s requirements (Performance Requirement 5 –PR5). The PR5 obliges Georgian Railway first of all to implement compensations at replacement value that must include options between cash compensation and in-kind packages based on provision of alternative housing to affected population. The compensation value should be based on the real estate market prices.
However, Republicans’ Party of Georgia claimed on October 27, 2010, that bigger part of the affected proprietors face expropriation threats. The problem is they refuse to sell out their lands and accommodations because Georgian Railway offers unfair compensations rating much below the market price. Georgian Railway meantime is empowered to expropriate the questioned property in case of refusal.

The EBRD’s PR5 standards require of Georgian Railway to conduct negotiations with the reluctant sides till the expropriation procedures are over, but Georgian Railway stopped negotiations actually, Nodar Ebanoidze, one of the affected proprietors, assures. He fears that this increases expropriation risks that most probably will be settled in favor of Georgian Railway. Georgian Railway offered Ebanoidze GEL 6 per square meter of agriculture land that costs at least GEL 15-20 based on market price.
“I researched the market price of my land spot and according to the assessment standards approved by the City Hall of Tbilisi in this past February my land costs GEL 20 per square meter. The problem is that my land that encompasses 1hectare of agriculture land is not decisive to me, I do not live there and will not be frustrated if I lose it, but my neighbors reside there and have a developed infrastructure and businesses. Only few accepted the proposal of Georgian Railway, bigger part turned down proposals and appealed to the president for help. But we also plan to appeal to the EBRD that is a part of the project and its requirements are violated in fact,” Ebanoidze told Georgian Journal.
The main pretension of affected people is that the document based on which the price is outlined is wrong-done. According to the EBRD standards, all information respective to the price-making in frames of the resettlement procedures must be transparent and available to publicity. However, Georgian Railway as well as its contractor company Samkharauli that implements calculation of prices in fact withholds this information to interested sides.

The cheque informing Ebanoidze of the price proposal did not include any due calculation based on which the price was inferred. Ebanoidze asked Samkharauli Company to provide with due calculations but it refused and pointed to Georgian Railway as the decision-maker. Georgian Railway did not provide Ebanoidze with the required calculation either under the pretext that it is a commercial secret. Meantime the name of Samkharauli Company that became a contactor to Georgian Railway via an open tender cannot be found at the official web-page of Georgian Railway among tender participants and winners.

Ebanoidze fears that the expropriation procedures that became easier lately may lead to unfair decisions. The point is that expropriation is settled via court that is not impartial in Georgia and most probably will settle in favor of Georgian railway and expropriate lands/accommodations for prices proposed by Georgian Railway or even lower.

“Court enables us to hire a reputable research company that will be provided with the unbiased market-research and prices, but it is too expensive and we cannot afford it, therefore we’ll be forced to trust court, that is of suspicious fame in Georgia,” Ebanoidze said. 
Georgian Railway started negotiations with the affected people in this past June and is supposed to get through with the resettlement procedures by the end of the year. However, a month ago legislation was amended and expropriation procedures became easier. If before amendment only Georgian President has a right to file an expropriation law-suit, now minister of economy is also granted with the similar right.

“The legislative change was obviously made to implement the expropriation procedures as soon as possible. Is the court supposed to settle in damage of the government?” Ebanoidze asks. 
Georgian Railway makes no detailed comments at the moment. According to Irma Stepnadze, Press Speaker of Georgian Railway, a hot-line is opened at Georgia Railway where citizens can apply with complaints.
“Georgian Railway will research the questioned information and make detailed comments on everything in a week,” Stepnadze promised Georgian Journal.

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