TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 215

G.F. 323

CONFIDENTIAL # ≈

2.

follows.

>

Before each quarterly payment becomes due, a calculation

will be agreed between the Hong Kong and U. K. Governments of the

changes necessary to adjust each of the separate components of the

garrison cost (other than capital works, maintenance and minor works)

listed in Annex B to the levels ruling at the beginning of that quarter.

The indices or other measures to be used in calculating these adjust-

ments are set out in Annex B, and the adjustments will be calculated by

references to the month by month movements in the indices and other

measures, assuming that one twelfth of the annual cost of the garrison

falls in each month of the year. The instalment to be paid at the end

of June 1976 will include the adjustments so calculated up to 1st April

Subsequent instalments will include the adjustments in relation

to both the quarter of payment and the immediately preceding quarter.

After the end of the period of the Agreement a calculation will be made

of any further adjustments needed and a final settlement will take place.

1976.

4.

All payments by the Hong Kong Government will be made in Hong

Kong dollars. Where these payments relate to components of cost in-

curred in sterling as indicated in Annex B, the conversion will be made

at the average rate of exchange for the quarter.

Detailed provisions

for the calculation and payment of the Hong Kong Government's contri-

bution will be set out in the STATEMENT OF FINANCIAL PROCEDURES

to be agreed between the two Governments.

CONFIDENTIAL

#para. 5.

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