Transport for NSW says work will begin next month to upgrade a key intersection on Nelson Bay Road, but the state government could be about to perform a spectacular triple backflip on the Fingal Bay link road.
The government promised just before the state election last year to spend $188 million on the "essential" Fingal Bay road, but the Liberal duty MLC for the Hunter, Catherine Cusack, said after the election that the project had been canned because Port Stephens MP Kate Washington had retained the seat on a platform which included opposing its construction.
Premier Gladys Berejiklian quickly stepped in to assure voters her government was committed to what was announced as a four-lane road into the coastal hamlet.
But a letter from Christopher Gulaptis, the Parliamentary Secretary for Regional Roads and Infrastructure, to Ms Washington last year said a yet-to-be-prepared business case would "consider the strategic merit of the project, including alternatives to the project, and environmental and community considerations".
Carving dual carriageway through prime koala habitat could be seen as controversial, especially in the current climate, a factor Ms Washington described as a "major local concern".
A government spokesperson said this week that Transport for NSW would "continue to work with Port Stephens Council to define the scope, costs and risks for the project so a full assessment ... can be completed".
Former Roads Minister Melinda Pavey said in March that the government had done its "homework" and would produce plans for the route by the end of 2019.
Ms Washington said on Thursday that she planned to write to the Auditor-General to seek an investigation into the road and its benefits.
Meanwhile, the government spokesperson said Transport for NSW would publish a "community consultation report" on the $275 million Nelson Bay Road duplication project "in the coming months" after calling for public feedback last year.
TfNSW moved utilities last month to prepare for construction to begin on a new roundabout at Lemon Tree Passage Road on February 3.
Ms Berejiklian committed before the election to building dual carriageway between Williamtown and Bobs Farm and said the "best advice I have from RMS is they can start the work this year and it will take about two years to complete".
Ex-Premier Mike Baird pledged in 2015 to set aside $70 million to upgrade Nelson Bay Road, though most of that has not been spent.
Port Stephens mayor Ryan Palmer said on Friday that he was happy with the project's progress and that the "major pinch point" at Lemon Tree Passage Road was being addressed first.
The government completed upgrade works on the Medowie Road roundabout at Williamtown in June and is now assessing whether to stick with the existing alignment of Nelson Bay Road to Bobs Farm or find a new route for the dual carriageway.