Government has agreed to compensate charity organisation Gift of the Givers to a value yet to be determined, for its interventions to alleviate the drought in Makhanda, the organisation said on Friday.

The breakthrough follows a "cordial, conciliatory and constructive" meeting with different stakeholders at the municipality chambers on Thursday, said Gift of the Givers CEO Imtiaz Sooliman.

"The chairperson of the meeting stated that there is no longer a disaster or water crisis in Makhanda and that the water situation had stabilised," he said, adding that they were satisfied with the outcome of the meeting.

"Gift of the Givers will be compensated to some extent. Invoices were thoroughly scrutinised at the meeting and Gift of the Givers were totally transparent. Further information was required on a few invoices which will be completed by Tuesday."

Earlier this week, the Makana Municipality apologised for the "misunderstanding" and said it was formulating how to compensate the organisation for the multimillion-rand work they had completed.

Asked to comment on the outcome of the meeting on Friday, municipality spokesperson Anele Mjekula said there was still outstanding information that the charity organisation needed to submit.

"It is expected that by Tuesday the report will be ready. The focus is around the value for money in terms of the work the GoG undertook, the efficiency and effectiveness of the boreholes and how long a period we will be able to draw water from these boreholes," he said.

Sooliman said the invoices would be matched against the work carried out.

"Payment will be considered for the 11 out of 15 of the boreholes drilled. Our expensive filtration system can be withdrawn, as there won't be a need for that given that the water situation had stabilised," he said.

"No further intervention is required in any form from Gift of the Givers. We need not incur any further expense (which will run into millions) to complete the intervention."

The municipality had lined up a list of preferred vendors to complete the work it deemed necessary.

The two parties had initially fallen out after the organisation said it was withdrawing its help from Makhanda. The municipality had indicated it was going to pay private companies up to R10m collectively to continue some of the work the organisation had done in the area.