The approval in March 2017, months before Capital Recycling Solutions announced its plans to divert almost the entire waste stream from the city's tip at Mugga Lane to Fyshwick where it would be sorted and burned for energy.

After hitting opposition, the company pushed back its incinerator plans, instead preparing a proposal that would see the rubbish taken by train to the Woodlawn bioreactor at Tarago. Its draft environmental impact statement is expected as early as next week.

Early last year, Purdon Planning for Capital Recycling Solutions was granted approval for a "hard stand" on the strip of land between its Ipswich Street block and the railway lines. At the same time, it was buying the strip of land from the government for what company director Adam Perry said was close to $1 million.

The hard stand is for a new heavy rail siding on the land, despite the IZ2 industrial zoning, which prohibits railway use.

The planning decision did not explain why the work was approved despite the zoning, simply saying the development met "the requirements for approval" and planning codes.

On January 16, Fairfax Media asked the directorate to explain the approval, receiving this response: "Your questions relate to a number of complex and interrelated issues. The questions raise detailed issues and require a complete response, which we will provide to you once we have done this."

This week, the directorate provided the detailed response, saying the company had not been given approval for a railway siding and would have to make another application for that. Permission had been given only for a "hard stand".

Capital Recycling's application asks for permission only for "works" on the block, without specifying what they are. But it says the plan is to build a new heavy rail siding on the site and it sets out five steps to that end, saying another development application would be submitted as the final step.

The Fyshwick site is to receive almost the entire 310,000-tonne household and commercial waste stream. Mr Perry said it was an environmental plus for the city, with the Woodlawn site generating 16 times more electricity per tonne of rubbish than Mugga Lane.

As to the incinerator plan, he insisted it was not part of the current project, and said it might never be built. But he would not say whether the joint venture with ActewAGL to generate generate electricity from the incinerator had been dissolved.

"The Canberra community's made it pretty clear to us that either they don't like the idea or they don't think it should happen here in Canberra or they need to know more about it," he said. "We believe that it is a worthwhile pursuit, we believe that the ACT government hasn't taken it off the table, and down the track we might look at it again. We might not too."

Mr Perry said the former Shell block, which is part of the site, had included a rail terminal.

The siding would allow the company to stop trucking waste to Goulburn before it was loaded on to trains. Capital Recycling had tried using trains from Kingston, but the wet 2016 winter had made that impossible.

"Every day we're sending trucks by road to Goulburn. It's expensive, it's inefficient and there's too many trucks on the road. And we really look forward to the day when we can run freight trains out of Canberra once more," he said.

Purdon Planning said the siding met the zoning "as an industrial use and associated uses" and was "consistent with the lease purpose clause". The rail siding would be in the railway corridor and a freight terminal was allowed under the IZ2 zoning, the firm said. The site had been previously used as a Shell depot which had involved much more intensive railway use.

Greens parliamentarian and ACT government minister Shane Rattenbury called on the planning directorate to explain the process.

While the idea of using rail to move waste was positive, he was concerned that the proponents "seem to be trying to break the project down into a number of different DAs in order to sell the project as something that it is not".

"Trying to seek approval for just a waste sorting facility and then come with an incinerator later is disingenuous," he said.

"Their intention is to create a degree of momentum that will ultimately lead to them building an incinerator that the community doesn't want."

Mr Rattenbury said while direct land sales of land were approved by Cabinet, he could not recall whether the Capital Recycling block had had gone to Cabinet.