Can I generate a clickable link to local file using relative path like "file:///~"
Here is the solution.
The script that generates the link, generats a url that starts with a custom googledrive:// and then the path to the file in the Google Drive folder.

I then set lincastor to trigger the following script for urls beginning with googledrive://

on handle_url(args)
    set theUnixPath to |URL_PATH| of args
    set theUnixPath to (POSIX path of (path to home folder)) &amp; "Google Drive" &amp; theUnixPath
    set theMacPath to (POSIX file theUnixPath)

    #display dialog "handle url: " &amp; theMacPath 

    tell application "Finder"
        set theItem to item theMacPath
        if (class of theItem) is folder then activate
        reveal theItem
    end tell
    activate application "Finder"

    return 1
end handle_url


The script is super easy, it takes the url, attaches the path to the user homes folder and /Google Drive/, then uses this generated path to open the Finder and reveal the item