A tense legal battle between local businesses and the New South Wales Government will potentially create a precedent for valuations paid for land that is compulsorily acquired.

Part of the $18.6 billion WestConnex project - the tunnel that will link the Anzac Bridge in Sydney with the M4 Motorway - runs straight past three Rozelle businesses: Swadlings, a family owned timber yard; Gillespies, a family owned business that is one of Australia's largest suppliers of cranes; and Desane, a property developer.

Their properties are around a kilometre from the Anzac Bridge - around three kilometres from Sydney's CBD. It is prime land for residential re-development.

The WestConnex project runs near three local businesses on prime residential re-development land. (AAP)

The three had applied for their industrial land to be re-zoned residential before the WestConnex project had been announced.

But 9NEWS obtained emails exchanged between the Roads and Maritime Service and WestConnex, in 2016, to seek delays of any potential re-zoning by the NSW Planning Department. The reasoning appears to have been to give WestConnex the time to compulsorily acquire the land - at prices many times less than it would be worth if it was re-zoned.

As Colin Swadling, one of the owners of the Swadlings Timber Yard, a family business that has been operating for more than 100 years, told me: "My suspicion is the government is acquiring our properties because they want to get the gains that we might have been able to get."

NSW Premier Gladys Berejiklian speaks to the media during a press conference while on tour of the new stretch of tunnel between Concord and Haberfield. (AAP)

Mark Swadling, who now runs the business, says the family was offered more than $20 million by developers - subject to a successful residential re-zoning. But the government offered the family $2.9 million, plus $900,000 relocation costs.

And with rising Sydney property prices, the family does not believe that is sufficient to find a site of comparable size close to their existing location. If a site cannot be found, the business may close, with the loss of 35 jobs and another 30 jobs at their Taree timber mill (which supplies the Rozelle yard) also in doubt.

Gianna Swadling told me: "We're not greedy people, we just want fairness."

Protesters hold signs during a rally against the WestConnex road project outside the NSW parliament building in Sydney. (AAP)

And to test the fairness of the government's decisions, the families now seem set to go to court.

Already there is the ASX-listed property developer Desane, in the NSW Supreme Court. The argument in court is not only about the level of compensation, but also whether the government actually needed to acquire the land for WestConnex. The government has recently argued that the sites may be turned into parkland once WestConnex is complete.

But there's one point these businesses still can't comprehend, articulated well by Colin Swadling: "All these businesses would like the government to lease our land while they do their work, and then give it back to us."