The two bidders have been invited to develop proposals to create an organic waste scheme to replace existing temporary contracts and divert more waste from landfill.
The councils will jointly provide kerbside source-separated food and green waste collections, which will be sent for treatment by the preferred bidder.
Both bidders are reportedly planning to use anaerobic digestion to process organic waste.
Kelda would potentially use its facility in Tremorfa if named preferred bidder whereas Shanks would utilise its plant in Pontypool.
Councillor Ashley Govier – “We are now close to selecting a sustainable organic waste solution that will transform the way we treat the food waste we all produce into energy and fertiliser whilst providing excellent value for money for our residents”
Cardiff Council cabinet member for environment, Councillor Ashley Govier, said: “I’m pleased this vitally important project for Cardiff and the Vale of Glamorgan has reached such an important milestone. The final two bidders are of excellent calibre with solid experience in this field and have come through a rigorous procurement process.
“We are now close to selecting a sustainable organic waste solution that will transform the way we treat the food waste we all produce into energy and fertiliser whilst providing excellent value for money for our residents.”
Thomas Hall, bid director at Kelda Organic Energy Ltd said: “We are delighted to have been progressed to the next stage of this exciting project. We look forward to continuing to work with the Cardiff Council Procurement Team, to deliver truly world class organic recycling facilities for Cardiff and Vale Councils.”
Peter Eglinton, UK managing director of Shanks Waste Management Ltd, added: “Shanks is delighted to have progressed to the shortlist for the Cardiff and Vale of Glamorgan Councils’ Organics Contract and remains committed to helping the authorities meet the Welsh Government’s targets for waste management through our innovative solution. We look forward to working alongside the authorities through the next stages of procurement.”