The Department of Water and Sanitation says it's not bankrupt and has the financial capacity to meet its obligations.
Spokesperson Sputnik Ratau told Huffington Post South Africa that the department's books are still balancing despite media reports that the entity is bankrupt.
"From where we are sitting with our projections we are still in a situation where we can meet our obligations. We are taking care of what needs to be paid," he said.
City Press reported on Sunday that Nomvula Mokonyane's department was broke. The newspaper reported that the department is R4.3 billion in the red, with hundreds of contractors unpaid for at least seven months, and that senior officials from the National Treasury, the department and a key water board told the newspaper that the department should be placed under administration because internal controls had collapsed.
The department is under investigation by the Public Protector and the Special Investigating Unit (SIU): the Public Protector is investigating the R26 billion Lesotho Highlands Water Project, which provides water for South Africa, and the SIU is investigating the Giyani Emergency Project.
Ratau added that despite projections looking good, there is a possibility of a shortfall but should that arise, they would be in contact with Treasury for assistance. He said they can always ask for permission to move funds around to ensure they are able to operate.
"National Treasury can also assist to rework the available budgets to get the job done," said Ratau.
He admitted that service providers were now approaching the courts to recover money owed to them but said the department is engaging with them to settle the matter.
"Depending on how much work was done and over what period, it might take some time to ensure payment is made. We can't have a one-shoe-fits-all policy but we will have to look at the invoices submitted for the work done," he said.