The department of human settlements, sanitation and water affairs was ready to pay contractors outstanding fees to get the stalled Giyani bulk water infrastructure project completed within the next seven months, director-general of human settlements and water affairs Mbulelo Tshangana said on Tuesday.

"There is progress, the pipeline is sitting at 95 percent completion as we speak, the only problem is that, for me, progress will be if the water starts running. I think we should be done with everything by June but, again, the problem for every construction project it is labour issues," Tshangana said after a briefing by the department to Parliament's portfolio committee on human settlement, water and sanitation.

He said the department was obliged to find a way around the drawn-out dispute with Khato Civils, the subcontractor that downed tools after claiming that it was not paid following the termination of the Lepelle Water Board in Limpopo's contract with LTE Engineering at the beginning of the year.

"If we have to pay people, we will pay them," Tshangana said.

"I think it would be wrong of us not to pay them, so we will pay them and once labour issues have been sorted out then construction will take place to complete the pipeline. We have already done reconciliation on what was paid, what was outstanding."

He conceded that the Special Investigations Unit's probe into the Lepelle Water Board, the implementing agency for the project, and its implications were complicating the mater, but said it should not be allowed to hinder completion.

"It is not like we are not moving on the five percent, we already have our fleet on the ground, the construction unit of the department is already on the ground. The only challenge is that SIU is asking us to recover money from the service provider.

"But the recovery, those legal issues can take place in court, but on the ground, we have agreed with the SIU that work should continue."

The SIU on Monday raided the headquarters of the state-owned Lepelle Water Board in Polokwane. The Giyani bulk water project, meant to lay water to 55 villages, ground to a halt last year when Khato Civils walked off the job, claiming that the department failed to pay it fees of R300-million and effectively forced it to lay off a thousand workers.

The SIU searched the water board's offices after complaining that it had refused to supply the unit with documents relevant to its investigation into what Finance Minister Tito Mboweni has described as a "cesspool of corruption" relating to the project, which at a price tag of R3.5-billion, has now exceeded its initial costing five times while villagers continue to wait for water.

Tshangana said the SIU was right to act because it head of the water board had erred by not handing over documents it needed.

The SIU is probing the entire process, including the roles of LTE and Khato Civils, and has already handed an interim report to President Cyril Ramaphosa. SIU spokesman Kaizer Kganyago confirmed that the interim report found that the awarding of the contract of to LTE was irregular as procurement rules were flouted. 

He said the fact that the initial contract was flawed did not preclude the possibility that value was for money was rendered, and the final would report would determine to what quantum, and hence how much could be recovered.