Several points come to mind:
One, why are they even bothering to switch the neutral? Totally unnecessary in any event. Perhaps the equipment was originally designed for 240 volts?
Two, simply replacing the contactor isn't gonna cut it. ANYTIME a wire is overheated, it will oxidize and become high resistance. The heat has ruined BOTH of the wires attached to that side of the contactor.
Only way to repair this is to:
First, quit switching the neutral, totally unnecessary. Splice it after cutting back or repull it.
Second, replace ALL of the wire connecting to the contactor, including the neutral and hot. (If space permits, cut the wire back at LEAST 8 inches and splice on new wire, otherwise repull it.)
And finally, replace the contactor again, no matter how the existing one looks.
Anything less and you'll keep having problems.
This is a common event on my cinema lamp rectifiers and the fix above is the only sure cure.
If the current measured on the hot and neutral are the same, quit trying to over-think the problem, because there isn't a problem. :grin:
Edited to add: If the neutral current is higher than that on the hot leg, then throughly check for another load bootlegged onto that neutral.