(VIII) HIRINGS

(IX) AIR TROOPING

CONFIDENTIAL

TOTAL

7

24

3.6

412

38

450

3. THE CHANGES IN COSTS OF THE ABOVE COMPONENTS WILL BE ASSESSED

BY APPLYING THE FOLLOWING MEASURES:

(A) FOR (1), MOVEMENTS IN BASIC RATES WHEREVER THE PERSONNEL

ARE SERVING.

(B) FOR (11), MOVEMENTS IN BASIC RATES:

(C) FOR (111), MOVEMENTS IN ACTUAL WAGE RATES:

(D) FOR (IV), CHANGES IN PROMULGATED RATES ASSESSED IN

ACCORDANCE WITH THE SERVICE-WIDE PRACTICE FOR LOA AND WITH THE

CIVIL SERVICE PRACTICE FOR FSA:

(E) FOR (V), CHANGES IN RATES AS PROMULGATED:

(F) FOR (VI), MOVEMENTS IN THE MONTHLY CONSUMER PRICE INDEX (B),

IN HONG KONG:

(G) FOR (VII), MOVEMENTS IN THE QUARTERLY TENDER PRICE INDEX COMPILED BY PWD, HONG KONG:

(H) FOR (VIII), MOVEMENTS IN THE ANNUAL RENTS OF THE FLATS IN HONG KONG IN USE BY THE GARRISON: AND

(J) FOR (IX), MOVEMENTS IN ACTUAL COSTS.

4. THE COST OF SERIAL (VII) IN PARAGRAPH 2 IS AN ANNUAL AVERAGE FIGURE. THE MEANS BY WHICH THE OUTSTANDING BALANCE IN RESPECT OF WORKS SERVICES WILL BE ADJUSTED BY APPLYING THE INDEX IN PARAGRAPH 3(G) IS DESCRIBED IN THE STATEMENT OF FINANCIAL PROCEDURES.

T5. IN RESPECT OF PARAGRAPH 2(IV) THE UNITED KINGDOM GOVERNMENT WILL REVIEW THE RATES OF LOA AND FSA HOT LATER THAN TWO YEARS AFTER THE COMMENCEMENT OF THIS AGREEMENT. IN ADDITION, IF AT ANY TIME THE RATES IN PARAGRAPH 2(1) ARE INCREASED BY AN AMOUNT SUBSTANTIALLY DIFFERENT FROM THE MOVEMENT IN THE HONG KONG CONSUMER PRICE INDEX (B) SINCE THE LAST SUCH INCREASE, BOTH GOVERNMENTS WILL REVIEW THE SITUATION TO ENSURE THAT NEITHER GOVERNMENT CONTRIBUTES DISPROPORTIONATELY TOWARDS THE PAY AND ALLOWANCES ELEMENT OF THE COST OF THE GARRISON.

P

60m CONFIDENTIAL

/PART 1.

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