Council previously refused the planning proposal for a service station and motel or hotel accommodation on Church Avenue, Colo Vale. However, the application is being reconsidered because of a review by the Joint Regional Planning Panel (JRPP) through the NSW Department of Planning and Environment which said the application had merit.

About a month ago, residents of Colo Vale and Alpine received a letter from council advising them of the project proposal and the developer's request for an amendment to the Wingecarribee Local Environment Plan (WLEP).

Councillor Ian Scandrett opposed the development and said it was the "perfect example of where inappropriate development will have major impacts on an area".

Colo Vale resident Kathleen Williard said there was no need for the service station.

"We have one in Pheasants Nest and Sutton Forest, why should we give up what we think is a beautiful part of the Highlands," Ms Williard said.

Several concerns have been raised by northern villages' residents, including the impact on wildlife, traffic safety, bushfire risk, aesthetics and pollution.

Alpine resident Helen Saville said she had great concerns for the koala population, which used the Church Avenue bridge as a corridor.

"There is a koala conservation strategy in this area so it is important to have a safe corridor for koalas," Ms Saville said.

"If you have a service station operating at night there then there is going to be a lot of road kill."

Colo Vale resident George Wagh said the service station would pose a significant fire hazard to all residents of the northern villages.

"Where it's proposed is on the main road in and out for us, if it's blocked with traffic or an accident, we would all be in trouble," Mr Wagh said.

Colo Vale Community Association president John Stead said it would take away the sales traffic from Mittagong and Colo Vale.

"The Colo Vale petrol station sells some of the cheapest petrol in the area, and they would undoubtedly be disadvantaged," Mr Stead said.

A council spokesman said the planning proposal was referred to the NSW RFS for comment but no objection was raised and if the development was approved, it was likely the surrounding roads would need to be upgraded to cater for additional traffic.

"All traffic is a threat to the shire's native fauna and any additional traffic has the potential to increase the threat to native fauna, but this is not limited to this development," he said.

As a result of the community interaction, council decided to place the matter on public exhibition for a second time in November and hold a public hearing in mid-February.