A second company is suing the NSW government over its delayed Sydney light rail project, adding to the $1.2 billion in claims already demanded by the Spanish contractor building the project.

Queensland-based VAC Group has taken the government to the Federal Court for breach of contract, claiming it is owed more than $4.3 million in damages for delays and additional costs.

Sydney's light rail project has been dogged by repeated delays, cost blow outs and now legal action. Credit:Jessica Hromas

The legal action comes as the government prepares to go head-to-head with Spanish construction giant Acciona in the NSW Supreme Court on Friday.

Acciona will seek orders from the court to dismiss a motion by the state's lead transport agency to strike out the Spanish company's $1.2 billion claim for costs and damages against the state.