Chauhan's outburst came in response to Municipal Commissioner S Jagadeesan's statement that the NRI offer for funding urban infrastructure projects could be considered only after getting the State government's permission.

Jagadeesan, who was apprehensive about the offer from the beginning, had been to Gandhinagar and had a meeting with the Finance department officials. On his return he issued a statement that the proposal could be considered only if the State or Central government cleared it.

His statement seems to have angered the ruling party, especially Chauhan, who is all for the loan offer. Chauhan said even if the state government refused to cooperate, the ruling party in the SMC would go ahead on its own.The former mayor said that the NRI firm, through its agents, had accepted all conditions laid down by the municipal corporation. It would be improper to turn down such an offer, especially when the firm was charging only a five per cent rate of interest, while the World Bank charged as much as 13 per cent, he said.

Also, he said, if the World Bank's conditions were accepted the civic body would be forced to hike water charge.

Besides, Chauhan said, accepting the World Bank loan would mean that the civic body would have to repay Rs 225 crore every year whereas its capital income was only Rs 125 crore. No other bank could give such a whopping loan amount at such a low rate of interest as offered by the NRI firm, he said, adding that if the NRI loan was accepted the civic body would have to pay only Rs 75 crore every year.