A plan for a privately-owned waste recovery and storage facility at Kembla Grange to expand seven-fold will now be sent to the Planning Assessment Commission (PAC) after an undeclared political donation from the facility's owner was revealed.
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The donation, not declared when Wollongong Recycling's major project application was lodged with the planning department, was made by applicant Adam Blackwell.
The money was a $1050 payment for membership of the Liberal Party, which counts as a political donation.
For more than six months, the planning department had let the application progress without the proper declaration in place.
Mr Blackwell's original signed declaration on political donations, available online until earlier this week, stated no donations had been made.
That declaration was itself only published after inquiries from the Mercury.
A few days later it was removed and replaced with the correct declaration.
In NSW, all political donations from major project applicants must be declared, in a system designed to ensure transparency and that governments and political parties cannot do favours for party donors through the planning process. The major projects process allows "state significant" developments to be approved directly by the planning minister, or the head of the planning department on delegation from the minister.
The application seeks to expand Wollongong Recycling's operations from receiving about 30,000 tonnes, to 230,000 tonnes of compost, metal, soil, building, concrete and brick waste, per year. It would also include waste storage and stockpile areas.
On Thursday, Mr Blackwell told the Mercury the company would comply with planning regulations, and said it was not appropriate to discuss the matter further as the application was being considered.
A statement from the planning department said it would investigate the matter.
"A political donation has now been declared and the statement uploaded to the department's website," it said.
"This declaration means this application will be determined by the PAC.
"The department's compliance unit will examine the late declaration statement."
The statement also said "political donations are not considered by the department when assessing applications".
The Mercury is not suggesting the application or its progress has been influenced by the political donations.
The application was not at the stage where the planning department had made a recommendation. But questions will be asked about how the project proceeded so far - the Environmental Impact Statement was lodged in September - without the proper donations declarations. The failures in this case were only discovered after questions from the Mercury.
At first inquiry, the planning department's media unit told the Mercury there was no need to submit a declaration on donations, as there had been no donations made, and there was no need to ask questions.
But a few days later, the correct donations declaration was on the major projects' website, and the department told the Mercury the application would now have to go through the PAC.
The department has not answered the Mercury's question of when the declarations were received.
