Leicestershire County Council has shortlisted three waste firms for its private finance initiative waste contract.
The shortlisted bidders are:
* United Utilities/John Laing Investments; and
The three remaining contractors have been chosen from a list of eight and are interested in developing a multi-million pound facility to treat up to 180,000 tonnes of waste each year by 2040.
A Leicestershire County Council spokeswoman said that details about potential locations or technologies are confidential to the bidders at this stage.
The companies will now be asked to produce detailed proposals explaining how they would deal with waste remaining after recycling and composting from 2015 onwards.
Cabinet member for waste Tony Kershaw said: Through recycling and composting, we are already diverting 167,000 tonnes of material away from landfill this project will help to cut the amount further.
We want to find the best solution to treat waste but we are only part of the way through the process and weve made no decision on the technology and no decision on a site.
A final decision will not be taken until late 2010. The facility will be built by 2015.
Last October, the Government announced it would provide £86.6 million towards the Leicestershire scheme under a PFI.