Metronet has consistently underperformed since taking responsibility for maintaining two thirds of the Tube network in April 2003. Most recently it was heavily fined (£2.2M) after speed restrictions were imposed on the District and Circle Lines because the firm failed to carry out routine maintenance (NCE 25 May).
'My message is if they do not deliver, if they continue to do what they are doing now, their reputations will suffer. With the Olympics and Crossrail we have a lot of work in London in the coming years.
'Would you let someone build that (the Olympics) who has not yet built a station on time or cannot put down track on the Metropolitan Line without trains hitting the walls of the tunnels?' he said.
'If you can clearly conclude that they haven't got the capacity to do what they said they would do here, then why would you give them another package of work?'
'Tube Lines is not perfect but they are letting work to people who are able to do it.'
Tube Lines maintains the remaining third of the London Underground network. Its programmes for station and track renewals are on time and it delivered the extra car on the Jubilee Line on time and budget.
Hendy is going to meet with the chief executives of all Metronet's shareholders Atkins, Balfour Beatty, Bombardier Transportation, EDF and Thames Water, to hammer home the message.
The majority of work is carried out by the consortia through three main contracts. Bombardier Transportation supplies new trains and signaling and Balfour Beatty carries out the majority of track work.
Joint venture company Trans4m, carry out civil engineering work and station refurbishment.
Balfour Beatty would not comment on Hendy's comments directly but said that it was hugely experienced in working on London infrastructure and has an excellent reputation.
Metronet said that in the last year it had hit its targets for track renewals and that it plans to get the station programme back on target within two years.
It added that mayor Ken Livingstone had recently publicly congratulated Balfour Beatty for delivering the new ticket hall at King's Cross station on time and on budget. The firm is now building the new northern ticket hall.