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CONFIDENTIAL
ANNEX B
3.
The changes in costs of the above components will be assessed by applying the following measures
(a) for (i), movements in basic rates wherever
the personnel are serving;
(b) for (ii), movements in basic rates;
(c) for (iii), movements in actual wage rates;
(a) for (iv), changes in rates as promulgated;
(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 the Public Works Department, Hong Kong;
(h) for (viii), movements in the annual rents of the flats in Hong Kong in use by the garrison;
(j) for (ix), movements in actual costs.
and
4. The cost of serial (vii) in paragraph 2 is an annual average figure. The outstanding balance in respect of works services will be adjusted by applying the index in paragraph 3 (g) as described in the Statement of Financial Procedures.
5.
In respect of paragraph 2(iv), the United Kingdom Government will review and, if appropriate, adjust the rates of LOA and FSA not later than two years after the commencement of this Agreement. In addition, if at any time the rates in paragraph 2(i) are adjusted by an amount substantially different from the movement in the Hong Kong consumer price index (B) since the last adjustment, both Governments will review the situation to ensure that neither Government contributes disproportionately towards the pay and allowances of the garrison.
B2 CONFIDENTIAL