Neckartal Dam builder Salini SpA on Tuesday notified some workers to stay home indefinitely after suspending operations at the dam building site.
Salini also instructed its subcontractors to notify their workers to not come to work until further notice.
"We would like to bring to your attention that the main contractor, Salini Namibia (PTY) Ltd, will be temporarily suspending activities at the site from 13 September until further notice. Therefore you are requested to stay home during the period of temporary work stoppage of activities," states a notice issued by subcontractor Henimma Investments CC to its workers.
It also states that workers would be contacted when normal construction activities resumed.
Sources said Salini workers were issued with similar letters.
Affected workers to whom The Namibian spoke yesterday, expressed concern that they might not be paid their full salaries, as no mention is made in the letters whether they have been sent home on full pay.
"There are speculations that we would only get paid for the days we have worked," one worker, who preferred anonymity, said.
About 600 workers have been sent on forced leave, The Namibian has reliably learned.
Sources have also indicated that Salini has booked flights for its foreign workers, who are expected to fly out of the country on Friday.
"Normally, foreigners are given return tickets, but this time around they were only given a single flight ticket," a source said.
This development comes after Salini this week sternly demanded government pay N$395 million in outstanding invoices, which would work to continue working on the project.
Nampa reported that Salini warned government of serious consequences if the current financial situation was not resolved.
The consequences mentioned include possible large scale lay-offs of workers, a breakdown in the relationship with suppliers and subcontractors and costly overall delays in the delivery of the project.
The Italian company's spokesperson, Castonguay Gilles Rene, yesterday declined to comment.
Salini SpA was awarded the N$2,4 billion contract to construct the Neckartal Dam near Keetmanshoop in 2014.
However, media reports suggest the project cost has already ballooned to over N$3 billion and is expected to escalate to N$5 billion by the end of the project, which was expected to be completed by the end of this year.