Nottingham City Council in the UK has finalised the two consortia to bid for its $667m (£400m) tram extension deal.
The companies are expected to submit their bids by May next year, for the contract to be awarded in August and work to begin in the autumn of 2011 and finish by 2014.
The second phase of the Nottingham Express Transit involves building a 7.5km line two to Clifton and a 10km line three to Beeston and Chilwell.
The 23-year contract would include operation of the new lines as well as the existing line one, which opened in 2004.
The Arrow Connect consortium includes Bombardier, transport operators VolkerRail and Nottingham City Transport Transdev as well as private equity investor CDC Group, and the Tramlink Nottingham consortium includes VINCI, Alstom, Keolis, Trent Barton, and infrastructure investment funds InfraVia and Meridiam.