An application by The Hills Shire Council to the Government's Infrastructure Loan Fund late last year for money to carry out the project was denied on the grounds that it did not meet the necessary criteria.

The $200million fund was aimed at enabling councils to top up development levies with an interest-free Government loan that would enable them to build roads, roundabouts, bridges and playgrounds.

Ten years was allowed in which to repay the loan.

Urban Taskforce chief executive Aaron Gadiel said in a statement that he was appalled that only six of Sydney's 41 councils had successfully applied for the loans.

The Hills Shire Council told the News last week that it had discussed the loan last August but had decided against applying because of concerns that it would be unable to repay the funds within the required 10 years.

``The council concluded it would not be in the best interest of existing and future ratepayers to expose ourselves to any new debt that relied on developer contribution plans,'' a spokeswoman said.

``The council did, however, put in a request under the Infrastructure Loan Fund for a project that involved upgrading all residential street lighting to a new fixture that consumes less energy than the current 80-watt standard light. The projected savings in power consumption would effectively have paid off the loan over the 10-year period.

``The State Government determined that this project did not meet its criteria.''