The final two shortlisted companies bidding for a 25-year, £400 million waste treatment contract for Bradford and Calderdale have been announced.

Earth Tech Skanska, and 3SE – a combination of Shanks and Scottish and Southern Energy – have reached the final stages of the contract process which began with 16 companies.

The contract is due to be awarded in 12 months and will mean more materials are recycled in an effort to avoid heavy landfill taxes.

Both firms propose building a plant on the Bradford Council-owned site at Bowling Back Lane, Bradford, which is used as a waste transfer station and household waste recycling centre. They are in discussions with the planning department about what can be built on the site.

Councillor Ghazanfer Khaliq, the Council’s executive member for environment and sustainability, said: “Bradford and Calderdale are working together to save money and develop an efficient and sustainable waste solution.

“Residents can rest assured that they will be informed and consulted about any decisions being made, taking into account their needs, environmental impact and value for money.

“We will make sure that the design, location and construction of any waste treatment facility will take into account the quality of life for local residents.”

Councillor Barry Collins, Calderdale Council’s portfolio holder for economy and environment, said: “Using landfill is no longer an option for dealing with our waste. It cannot be justified either environmentally or financially.”

The contract is to deal with household waste from 2015 and both companies are suggesting processes which involve taking out the waste that can be recycled or composted, then using energy from waste treatments.