Businessmen who have secured contracts to build massive gas pipeline linking EU and Azerbaijan were convicted for tender rigging and bribery

Work has begun on the Turkish section of the Southern Gas Corridor. Photo: Tanap
Work has begun on the Turkish section of the Southern Gas Corridor. Photo: Tanap

The World Bank has approved $800m in loans for a gas pipeline through Turkey and Azerbaijan that will be built by several companies with a history of corruption scandals.

The World Bank’s board of directors on Tuesday granted $400m loans to the Turkish and Azeri governments to complete their 1,850 km segment of the Southern Gas Corridor – known as the Trans-Anatolian Natural Gas Pipeline (Tanap) – which will connect southern Europe with gas fields in Azerbaijan.

In Turkey, the World Bank loan will be overseen by state-owned corporation Botas, which has contracted various construction companies to complete sections of the work.

Powerful executives within these companies were convicted for their involvement in organised gangs that systematically rigged tenders in the energy sector during the 1990s and 2000s, according to a report released last week by Bankwatch.

#SouthernGasCorridor or Southern Graft Corridor? Who benefits from Europe’s pet #energy project? #corruption

— Bankwatch (@ceebankwatch) December 14, 2016

The Fernas group, which will build a 375km section through northeastern Turkey from the Georgian border, is owned by Muzaffer Nasiroğlu. Nasiroğlu was jailed for bribery and corruption in 2005. The current CEO of Fernas, Yaşar Giregiz, was also convicted for his involvement.

At the opposite end of the pipeline, where the Limak company will build the section that crosses the Greek border, the chairman of Limak Nihat Özdemir was convicted in 2008 for his involvement in rigging tenders, including for pipeline projects.

Botas, the state-owned pipeline company that granted tenders to Limak, Fernas and others, was at the centre of a massive investigation, known as Operation Blue Line, which lead to 77 executives (including Nasiroğlu and Özdemir) standing trial in 2008.

Initially a court sentenced all 77 defendants to jail, but a series of appeals finally lead to an overturning of the judgement in the Supreme Court in March 2016 due to insufficient evidence.

The World Bank has been contacted for comment on the contents of the Bankwatch report.

On announcing the loan on Tuesday, World Bank vice-president for Europe and Central Asia Cyril Muller said: “Tanap will not only boost competitiveness and create economic opportunities for people in Azerbaijan and Turkey, it will also support regional trade, improve connectivity, and support energy security in Turkey and in Europe.”

Report: Human rights review quashed…