Ottawa waste management company Plasco has laid off a dozen workers, amid questions about whether it has the money to fulfill its contract with the city.

CBC News has learned 12 workers were let go earlier this week from Plasco’s demonstration plant on Trail Road. The company still employs 110 people.

Plasco vice president of public affairs Edmond Chiasson said these workers are no longer needed since the plant is changing from a "demonstration facility" to a "technology development facility."

"This week we decided for the new role of the Trail Road facility, we didn’t need as many people working there," he said.

The Trail Road plant has experienced frequent breakdowns during its demonstration phase, breakdowns that have raised doubts about its ability to handle the city’s waste.

Plasco has until Dec. 31 to prove to the city it has the money to build a plant capable of processing 150,000 tonnes of garbage a year, having already asked for and received two extensions.

Chiasson would not comment on whether they’re confident they can get that funding by the end of the year, saying instead "We are working very diligently to get to the next stage… (and) build our first commercial plant here. We are very encouraged about where we are going to end up."

The city reached a 20-year, $180 million deal with Plasco in 2012 to process up to 300 tonnes of residential waste per day, turning it into energy using a process called plasma gasification — using electricity and high temperatures to break waste down into gas and solid waste. But the technology has not been proven to work on a large scale.

Plasco said after the second extension they still plan to start treating some of the city's residential waste by 2016.

In a statement, city media relations officials said the city isn't reading into the decision.

"In keeping with Council’s direction, the City looks forward to an update from Plasco by the end of the year," the statement said. 

"In the interim, the City is not in a position to speculate about Plasco’s Human Resources or business operations decisions."