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STEVE INSKEEP, HOST:

And let's talk about to grow the infrastructure and the economy of India – one of the world's rising economies. One of India's biggest plans is for a $12 billion steel plant in the eastern state of Orissa. It involves money coming from a South Korean company, which would make the biggest foreign investment in modern India.

But as NPR's Corey Flintoff discovered, farmers and fishermen living in that area don't want the plant.

COREY FLINTOFF, BYLINE: The project is being promoted by the South Korea-based firm, POSCO, the fourth-largest steel producer in the world. In 2005, POSCO signed an agreement with the Indian state of Orissa. The deal called for the company to build a steel mill, electrical generating plant and port on India's east coast.

POSCO Vice president Vikash Sharan says the mill will eventually provide 18,000 jobs in what is now a rural area that depends on farming and fishing. He says the company believes another 30,000 jobs will be created indirectly.

VIKASH SHARAN: We had also planned that at least one person from each displaced family will get a job in the company. We had also conducted many training programs so that they become employable.

: The plant was set to begin producing steel in 2010, but so far, the company hasn't even broken ground on a site. That's because local people and environmental activists have blocked the project in the courts and on the ground.

(SOUNDBITE OF CROWD CHATTER)

: This is an anti-POSCO demonstration on land that would be lost to the steel mill. About a hundred people from three area villages are gathered under some fir trees on a sandy rise. They say they come here each day so they can be ready to block a proposed road to the site.

MANORAMA KHATUA: (Foreign language spoken)

: This is Manorama Khatua, a young woman with piercing eyes who has become one of the leaders of the anti-POSCO group. POSCO says it needs around 4,000 acres. Much of that is government land that has already been committed to the deal, but Khatua says the farmers control around 400 acres at a crucial part of the site.

KHATUA: (Foreign language spoken)

: She gestures out from the sandy knoll where the demonstrators sit. The land below is idyllically beautiful. Khatua says the local farmers aren't interested in the proposed mill jobs. They already make a good living from their livestock, fish, cashew nuts, bananas and arbors where they grow betel leaves for the ubiquitous Indian chew called pan.

Prashant Paikray, an anti-POSCO activist, also charges that the company bribed politicians to win approval for the deal.

PRASHANT PAIKRA: The state political leaders, ruling class people, they are involved in this great corruption of POSCO.

: Paikray sits on a cot in his small house in Bhubaneswar, the state capital, under fading photographs of Lenin and Marx. He's a member of Orissa's active Communist Party.

POSCO's Vikash Sharan emphatically denies the bribery allegations.

SHARAN: This is absolutely wrong. POSCO is globally known as a very ethical company. We believe in following the correct processes and following all the laws of the land to the hilt.

: Sharan says the very fact that POSCO has waited for six years to develop the project shows its commitment to comply with the law, including measures to protect the environment. But Manorama Khatua says the company and the state haven't waited patiently during the legal challenges. She charges that they have tried to break the resistance movement by sending thugs to attack the demonstrators. She says the police have filed dozens of trumped-up charges against the main organizers in an effort to wear them down.

The anti-POSCO movement's leader, Abhay Sahu, was arrested last month on what the police say were outstanding warrants for alleged crimes that had nothing to do with the protest.

R. Venkatesan is a lead consultant at India's National Council of Applied Economic Research in New Delhi. He says India needs the foreign exchange money that exports such as steel can provide. More importantly, states like Orissa need to create jobs for the enormous numbers of young people who will be entering the job market in the coming years.

R. VENKATESAN: Orissa is a mineral-rich state, and its development would be only when these minerals are processed. So obviously from the state viewpoint, it has a tremendous development potential.

: But Venkatesan says that's not much incentive for the people who stand to lose beautiful farmland that provides them with steady income. Vikash Sharan, the POSCO vice president, says the company is talking directly with local people who have questions about the plant, and he says most people are coming to support the project. He says the company plans to begin serious construction soon.

Corey Flintoff, NPR News, New Delhi.

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