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England to crack down on contractor margins

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PROFIT MARGINS of roads contractors are to come under scrutiny as the Highways Agency looks to demonstrate its new commercial teeth.

New interim major projects director Jerry England told NCE that he will be looking to emulate Thames Water's procurement approach, which is infamously tight on margins.

Under England's stewardship, Thames Water has moved to a procurement strategy where contractors and suppliers are permitted margins of just 2% (NCE 29 April 2004).

'I will be discussing with the supply chain about making a reasonable margin, but getting them to work with us to drive costs out.

England would not be drawn on what a 'reasonable' margin was, adding only that 'it's a competitive market'.

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