NSW urged to revive Block makeover

The company says the Pemulwuy Project is on hold because it will not be able to raise the development application fee until the application is passed.

Opposition planning spokesman Brad Hazzard says the Government strikes deals with big developers and it should do the same with the not-for-profit Aboriginal Housing Company.

"The Department of Planning is really just doing [Planning Minister] Frank Sartor's bidding because he doesn't like this project," he said.

"The reality is in determining what the fee is for each development, there is a lot of discretion to be applied.

"What the state Liberals and Nationals are saying to Frank Sartor is, 'Show some discretion, just show us what you can do when you are doing a deal with a major developer.'"

The Aboriginal Housing Company wants to rebuild most of the houses on Redfern's The Block because it says they are infected with mildew and infested with vermin.

The Pemulwuy Project would also include a business college, spiritual centre, art gallery and gymnasium.