Wollongong MP Noreen Hay has "no faith" the region will ever see the $100 million from the 99-year leasing of Port Kembla.
The lease, which is expected to be finalised in the first half of this year, is estimated to be worth $500 million.
Of that, Treasurer Mike Baird has promised the region will get $100 million to spend on infrastructure projects.
In October last year, Mr Baird said the money was "locked in stone", regardless of the final amount realised by the leasing.
However, Ms Hay said the region may not get that money because the promised $100 million was not included in the legislation to lease the port.
"[The government] gave absolute commitments they weren't going to privatise that port. They gave commitments they would put lifts in at Unanderra railway station. They gave all sorts of commitments and they've broken them all," she said.
"So I have no faith in the commitments given by this government at all. Why would you believe them?"
Ms Hay claimed that too much time had been spent "squabbling" about where this money would be spent instead of holding the government to other commitments it made about the leasing of the port.
"Instead of squabbling, we should be holding the government to account on their statements that it would lead to increased jobs, increased investment and greater opportunities," she said.
To that end, Ms Hay said she would be meeting with Port Kembla Port Corporation chief executive Dom Figliomeni and government representatives to discuss the future of the port and the suburb.
If the $100 million did materialise, Ms Hay said the bulk of it should be spent in the area around where the port itself sat.
"My view is that the area in most need of investment is Port Kembla because clearly it is on the rise and coming good," she said.
"I'm very concerned about the change in direction from investment into the port as a public facility [and] whether or not Port Kembla will be a beneficiary in terms of a private organisation."
Acting Treasurer Greg Pearce reaffirmed that the region would receive the $100 million.
"The government is committed to using $100 million of lease proceeds on infrastructure projects throughout the Illawarra," he said.
Mr Pearce did not respond to questions about whether the $100 million was in the legislation enabling the lease of the port. Nor did he confirm whether the money could be spent in a Labor electorate. He did, however, state that the government would act as an overseer on regulatory matters and would ensure any new owner would continue investments.
"The new operator will be required to make an annual contribution to improving road and rail landside logistics related to the port," Mr Pearce said.