In a capacious brick warehouse in the historic Eveleigh railway precinct, hundreds of tonnes of heritage railway carriages and equipment is sitting idle after the NSW government terminated a tour company's access to the site and changed the locks.

For 30 years, 3801 Limited, a heritage rail company run by volunteers, has had almost exclusive use of the warehouse - called the Large Erecting Shop - to run its historic railway tours through the Southern Highlands and along the Hawkesbury River.

The heritage rail group's access to the site, so close to Redfern Station, has been periodically threatened. When in 2006 the former Labor government indicated it might sell the site for development, then opposition transport spokeswoman Gladys Berejiklian insisted it should continue to be used for heritage rail, and said 3801 had been doing a great job.

But in January, after years of failed negotiations and time extensions, Ms Berejiklian's government acted on its plans to convert the warehouse into a facility that could also be used by other rail heritage companies.