The Sinfin Lane waste plant was due to be handed over in April 2017 but has still not been fully commissioned by Interserve.
Now the councils have issued a procurement notice signalling their intention to retender the waste PFI contract with the Resource Recovery Solutions (Derbyshire) joint venture if the council cabinet formally decides to tear up its previous deal.
The notice is intended to sound out interest from firms in taking over the 27-year deal, which runs until 2042.
A formal invitation to bid for the waste management contract could be issued in the last quarter of this year.
Derby council’s leader Chris Poulter, said: “The PIN notice issued to the waste industry is all part of our planning to find a contractor with the necessary experience, technical competence and financial backing to deliver this waste management contract if the current contract with RRS is brought to an end.”