SALINI Impregilo, the Italian company building the Neckartal Dam near Keetmanshoop, has started retrenching some workers ahead of the completion of the project.
The project is anticipated to be completed by 29 December.
According to a letter that Salini, which won the N$2,8 billion tender to construct the Neckartal Dam near Keetmanshoop, wrote to the labour and social welfare ministry's permanent secretary towards the end of August, they intended to start the phased retrenchments from 1 October until the completion of the final work.
"All employees of the company will be affected in all categories. It is difficult for the company to determine the particular date of retrenchment of the employees and categories that will be affected," the letter stated.
"An updated list of affected employees and their respective dates of retrenchment will be furnished to your office," the letter reads.
The Namibian has established that the company has already served some workers with contract termination letters in the first week of October.
The company last week resumed operations which had been suspended for about two weeks over government's failure to pay Salini about N$600 million.
Recently, agriculture minister John Mutorwa revealed at a meeting he held with the company that government would ask NamWater to borrow money to pay Salini's unpaid invoices.
At that meeting, it also emerged that government had paid more than N$3 billion to Salini by the end of June, while the cost of the project is expected to escalate to N$5 billion upon completion.
Salini's spokesperson, Gilles Rene Castonguay, yesterday confirmed that the company had resumed operations at the construction site at the beginning of October after government had made some payments.
However, he declined to reveal the "specifics of government payments".
Castonguay could also not be drawn into commenting on the planned lay-offs of workers, saying the company is not at liberty to discuss "staff issues".