THREE firms are in the running to win a contract to operate a huge new energy plant which will take household waste from seven North-East councils.

The plant, which is expected to be built on a 25 acre site near Redcar, will take up to 450,000 tonnes of solid waste a year which cannot be recycled, diverting it from landfill, and creating renewable energy and heat from it.

The five Tees Valley councils – Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton, along with Durham County Council and Newcastle City Council have joined together to create an opportunity for a contractor to design, build, operate and finance the energy recovery facility.

Nine firms were involved in the initial stages of the procurement process after expressing an interest, but this has now been narrowed down to three – Viridor Waste Management Ltd, Suez Recycling and Recovery Ltd and Green Recovery Projects Ltd.

Meetings are set to take place with the three companies over the next six months in a bid to clarify aspects of their proposals.

The bidders will then be invited to submit final tenders to be evaluated by council chiefs by the end of November next year.

The successful company should be confirmed next December with the facility due to be up and running from April 2026.

They will be given a minimum 29 year contract to build and operate the plant with the potential of an 11 year extension.

When the contract expires it will revert to be jointly owned by the seven councils in the project.

The contract could be worth as much as £2.1bn over its duration.

Meanwhile, the planned development will create 300 jobs during the construction phase and 40 full-time jobs.

It is expected that the combined tonnage of waste going to the facility will prompt economies of scale cost savings for the seven councils.

Redcar and Cleveland, Hartlepool, Middlesbrough and Stockton councils currently have a contract with Suez – formerly SITA – at Haverton Hill to treat household waste that cannot be recycled, but this is due to end in 2025.

Redcar and Cleveland Council’s growth, enterprise and environment scrutiny and improvement committee was given an update over the plans with members requesting more information on the three bidders ahead of their next meeting.