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a. Management fees expenses of R 100,4 million, which is a reclassification of the CentlecSeconded Personnel line item costs to general expenses. The reclassification is mainly as aresult of the change in the accounting practice for the seconded personnel. The variance of R96,9 million is mainly as a result of vacant and new positions that will henceforth be directlyfilled by the entity, instead of the parent municipality.b. The net growth in the expenditure line item after discounting the management fees amount, isonly 10,21% (R 48,8 million) on the Adjustment Budget amount of R 477,8 million. Thechanges in budget can be mainly attributed to the following costs elements. As per the tablebelow:R’0002014 Africa Nations Championship 5,000Branding (2,580)Electricity - municipal use 6,700Hire Equipment – Municipal entity 7.798Investment Promotions 7,600Legal Expenses 9,907Refurbishment Water Supply System DWA 7,900Rental Offices - entity 5,566TOTAL 47,891Bulk PurchasesBulk purchases (water and electricity) grew by 8.36% (R 123,6 million) against the 2012/13 budget,to the proposed amount of R 1,602,4 million for the 2013/14 budget year. The allocation for thetwo outer years of the MTREF period is R 2,026,7 million and R 2,324,3 million respectively. Bulkpurchases takes up approximately 29.95% of the operating budget for 2013/14.ElectricityElectricity contribution to the bulk purchases costs is R 1,250 million (2012/13 - R 1,149,4 million).The increase in the electricity purchases costs is R 100,6 million (8.75%) and the electricitypurchases constitutes 23.36% of the operating expenditure budget. The bulk electricity purchasesallocation for the two outer years of the MTREF period is R 1,630 million and R 1,887,9 millionrespectively.WaterWater purchases for the 2013/14 budget year is estimated at R 352,4 million (2012/13 - R 329,3million) representing a growth of 7%. The allocation for the two outer years of the MTREF periodis R 396,7 million and R 436,3 million respectively.Contracted ServicesContracted Services budget is declining by 7.61% (R 24,5 million) to R 297,1 million in the 2013/14budget year from a base of R 321,6 million in the 2012/13 adjustment budget. The allocation forthe two outer years of the MTREF period is R 271,9 million and R 270,7 million respectively. Thedecrease in cost can be mainly attributed to a drop in the Commission on Vendors expenses froman Adjustment Budget provision of R 56,2 million to R 23,6 million in 2013/14.Interest on External BorrowingsInterest on the external borrowing budget is R 202,1 million for the 2013/14 budget year,representing a growth rate of 23.31% (R 38,2 million) on the approved Adjustment Budget of R163,8 million in 2012/13. The allocation for the two outer years of the MTREF period is R 215,4million and R 231,1 million respectively. The increase in the interest expenses can be attributed toan increase in the DBSA External Loan interest provision of R 24,8 million and Inter-company Loanaccount provision of R 13,3 million.Repairs and MaintenanceRepairs and maintenance growth is 11.25% (R 30,0 million) on the 2012/13 approved AdjustmentBudget R 266,8 million to a new budgetary allocation of R 296,9 million during the 2013/14 budgetyear. The allocation for the two outer years of the MTREF period is R 319,7 million and R 344,4million respectively. The breakdown of this expenditure is as follows:Infrastructural AssetsThe bulk of the repairs and maintenance budget, say 66.08% is to be spent mainly on theinfrastructural assets in 2013/14 budget year. The allocation on this category has been increased9