Sita UK was awarded a 30-year waste management contract worth £1.2bn by the Merseyside Recycling and Waste Authority (MRWA) in April.
However, losing bidder Covanta has secured an interim injunction after challenging the legality of the procurement process.
The Technology & Construction Court will not hear the case until next spring, putting everything on hold.
Sita’s plan is to build a rail loading waste transfer station at Knowsley Industrial Park, Kirkby with capacity to load out half a million tonnes of unrecyclable waste a year. This will be sent by rail across the country to a new purpose-built energy-from-waste incinerator on the Wilton International industrial estate on Teesside.
The new-build element is set to cost £250m and create hundreds of construction jobs if or when it is finally cleared.
MWDA chief executive Carl Beer said: “Whilst it is appreciated that an unsuccessful bidder will naturally be disappointed at the outcome, MWDA has conducted an extensive and fair procurement process over several years and is confident that the most economically advantageous solution has been selected for Merseyside.
“MWDA therefore rejects the challenge made by Covanta and intends to vigorously defend the claim brought against it.”
Covanta, backed by Peel Holdings, proposed to build an incinerator next to the Manchester Ship Canal.
Sita is a French company. Covanta is American.