More than 4,000 people are facing eviction to make room for the 2014 Winter Olympics in the Black Sea resort of Sochi, according to campaigners, who say that many will receive little or no compensation.

“My family has lived on this land for five generations,” said Dmitry Drofichev, a farmer. “We are being offered a fraction of what the land is worth. They’ll have to bulldoze me and the house to make me move.”

The authorities have already begun forcibly removing people from areas where Olympic facilities are to be built. Fifteen families of refugees from a war in the neighbouring republic of Abkhazia have been evicted from the outskirts of Sochi where they have lived for 15 years. They have nowhere to go.

Residents fear systematic evictions after the Duma, Russia’s lower house of parliament, passed a bill known as the “Olympic law”, which will speed up the confiscation of property. Typically, land offered to those facing eviction is said to be in remote and rundown areas and payments are far below the value of the property appropriated.

“We are being offered a far-away plot in the mountains and compensation that is 15 times lower than our land’s current market value,” said Drofichev.

The dispute is clouding preparations for the Games, the first to be held in Russia since the 1980 Moscow Olympics, which were boycotted by many countries in protest at the Soviet invasion of Afghanistan.

Sochi, which is a short drive from Krasnaya Polyana, a mountain resort favoured by Vladimir Putin, previously bid for the 1998 and 2002 Winter Olympics, but lost after concerns were expressed about its Soviet-era infrastructure. To the surprise of many, Sochi beat Salzburg and Pyeongchang in South Korea in a close race for the 2014 Games.

The decision was seen as a personal triumph for Putin, a keen skier, who travelled to Guatemala to make an impassioned speech to the International Olympic Committee. Russian state television declared it “perhaps the greatest success in Russia’s modern history”.

Seven months later, the challenges of turning Sochi into an Olympic resort are becoming clear. Putin pledged £6.5 billion in state and private investment towards the Games. But the Kremlin’s original estimate did not include some of the infrastructure or the costs of buying 600 hectares of land.

Sergei Stepashin, the head of Russia’s state Audit Chamber, recently warned that the 2014 Games could cost £12 billion, double the original estimate. By comparison, the 2006 Turin Winter Olympics are thought to have cost about £1.5 billion and the bill for the 2010 Vancouver Games is expected to total about £2 billion.

Putin who, like Stalin before him, has his summer residence in Sochi, recently lamented the fact that even the city’s sewerage system is so dilapidated that pipelines often burst. Power cuts are commonplace. Some 200 building projects will have to be completed over the next seven years, including not only sports facilities but also railways, motor-ways and a new airport. The price of land in and around Sochi has gone up by 500% and is now said to be the most expensive in Russia.

Critics are warning of a rise in corruption. A commission set up by Putin to prevent money for the Games being siphoned off has not deterred some local bureaucrats. One official was caught trying to extort £200,000 from a businessman in return for ensuring that his land would not be confiscated.

“When we heard that Sochi had won the bid we were all overjoyed,” said Andrei Loginov, one of those facing eviction. “We thought it would bring in investment and create jobs. Now we realise that only a small clique stands to make fortunes, whereas ordinary people like us will just be pushed over and left behind.”

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