Officials say the money, raised for water and drainage projects, has to be kept in banks because it can be spent only on specific projects and cannot be used in one go. But the loss of interest is only one per cent, they claim. Others, however, accuse the AMC of lacking a proper plan.

According to Congress corporator Badruddin Shaikh no work was done in the first six months. Now also, the pace of work is so slow that the work just could not be completed by the deadline year of 2001, he alleges. While AMC paid 14 per cent to the public, it got much less from the banks, he says.

Officials explain that planning and processing of tenders would take time, but they deny that the pace of work is slow. Works on water projects of Rs 70 crore has already begun, while Rs 14 crore has been spent on drainage projects, they say. Besides, every project has a gestation period, points out Municipal Commissioner B K Sinha.

The AMC deposits earn interest at rates which vary from 6.5 per cent to 14 per cent. Officials say that the average interest is 13 per cent and, therefore, the loss is only one per cent. But the claim is not borne out by facts. In one year from March 25, 1998 to 1999, the AMC received only Rs 8.37 crore as interest on deposits of Rs 271.56 crore from 20 banks.

It is learnt that only about 20 per cent of the amount has been spent. Some officials admit that advance planning could have prevented funds being kept idle for long. Even now, the pace of work could be improved, they agree. So, as long the funds remain unutilised, the AMC would keep paying a high price for its borrowings.