Opposition roads spokesman Ryan Park says NSW Treasurer Mike Baird is holding the region to ransom by linking Princes Highway upgrades to a Port Kembla port lease.
The Treasurer told Parliament this week that future projects, such as stages two and three of the Princes Highway upgrade, "cannot proceed" if Port Kembla was not leased.
Mr Park, who was appointed to the NSW Labor frontbench earlier this week, said the region should be worried about this approach by the government.
"What I think the community has the right to be concerned about is a ransom-style approach where the government says you must sell a public asset that generates $50 million a year, or this won't happen," the Keira MP said.
"That was never the talk in the lead-up to the last election. Never once did they certainly say that projects as important as the Princes Highway were dependent on the sale of the port.
"That was never articulated. To say that now, 18 months in, is a bit mischievous in my opinion."
Kiama MP Gareth Ward, who has championed the Princes Highway upgrades - the first stage of which is not in danger - confirmed there was a link between the leasing of the port and future work on the major road.
Mr Ward said the port lease was a way to gain funds for infrastructure projects that would otherwise not be built.
"We are not a government that spends more than we earn, like any household, like any business," he said.
"If you continue to spend more than you earn then you find yourself in an invidious situation.
"What we are doing is leasing assets and recycling those funds back into infrastructure like the Princes Highway.
"If Labor continue to oppose the leasing of these assets to reinvest into infrastructure, stages two and three of the Princes Highway may be at risk."
Mr Ward said getting the first stage under way was one of the reasons he stood for election.
"It's now being done," he said.
"I don't want to risk the future stages of the upgrade; that is why I support the leasing of the assets, to make sure we generate the revenue we need to get the state moving again."
Wollongong City Council's Port Working Group's forum on the leasing of Port Kembla will take place at Wollongong Town Hall on November 7 at 6.30pm.
Minister for the Illawarra Greg Pearce has agreed to speak at the forum, as has South Coast Labour Council secretary Arthur Rorris.
"Finally the Illawarra community will have its chance to hear directly from the government about the port privatisation proposals and to weigh up all sides of this argument," Mr Rorris said.