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Tender rises 'will outdo inflation'

TENDER prices are predicted to rise at twice the rate of general inflation next year as hikes in the costs of steel and oil are passed on by contractors.

Latest research by consultant EC Harris shows that tender prices have grown 5.3 per cent this year. And increases are predicted to continue in 2005 at the rate of 3.6 per cent, with an even higher figure of 4 per cent for civil engineering work.

EC Harris chairman Richard Clare said: 'Demand for contractors' services has continued to increase, driven by Government initiatives, particularly in health and education.

'Although the London market has suffered more than most, there is no lack of work across the rest of the country and on some schemes it has been necessary to adopt alternative procurement strategies in order to secure tenders.

'The worries about steel prices have led contractors to make judgements on risk and these assessments are obviously adding to tender price rises.'