CONFIDENTIAL
3.
This Agreement will run from 1st April 1976 for a period
of 7 years in the first instance and will be renewed on the same
terms for further periods of 5 years thereafter, unless either
Government gives notice a year before the end of any period that
it wishes to vary the terms.
4. The cost of the garrison is based on price levels at September
1975. The Hong Kong Government contribution, as provided for in
paragraph 2, will, after setting off the United Kingdom Government
share of expenditure on works services in the manner described
in paragraph 6, be paid by quarterly instalments on the last day
of each quarter of the financial year, with adjustments for
changes in the price levels ruling in Hong Kong and the United Kingdom
being made as follows. Before each quarterly payment becomes due,
a calculation will be agreed between the Hong Kong and United
Kingdom Governments of the changes necessary to adjust each of
the separate components of the cost of the garrison (other than
works services) listed in Annex B to the price levels ruling at
the beginning of that quarter. The indices or other measures
to be used in calculating these adjustments are set out in
Annex B, and the adjustments will be calculated by reference to
the movements in the indices or other measures. The instalment
to be paid at the end of June 1976 will include the adjustments
so calculated up to 1st April 1976. Subsequent instalments will
include the adjustments in relation to both the quarter of payment
and the immediately preceding quarter. After the end of the
Agreement, a calculation will be made of any further adjustments
needed and a firal settlement will take place.
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- 2.
CONFIDENTIAL