Birmingham's roads contractor has been ordered to sort out the city's pothole-ravaged streets after they were condemned as "unacceptable".
The city council told Amey to stop moaning and get down to work after the firm tried and failed to rip up its £2.7 billion deal to service roads until 2035.
In a withering assessment of the company's performance, assistant highways boss Kevin Hicks said the authority had spent four years trying to get Amey to make good on its commitments.
He said: “The council notes that Amey has stated that it wishes to withdraw from its contract in Birmingham.
"During the last four years we have tried a number of ways to get Amey to provide the investment that they signed up to and that is needed on our highways network.
"We are disappointed that Amey has not provided that investment and as a result they have performed poorly.
"It is this poor performance that has led to significant deductions in payment to Amey.
“We need to address the unacceptable condition of our roads, which is evident through the number of potholes that we all see.
"The way forward must provide the best possible value to the public purse, delivered by a contractor who can give us the confidence and assurance that the required services can be delivered properly.”
Amey previously announced it was facing a £209 million loss after losing a Court of Appeal case to the council earlier this year.
The company was found to have ‘deliberately’ left defects in selected roads after wrongly re-interpreting the contract in its favour in 2014.
Amey's report for the first quarter of 2018 said it had set aside £209 million to cover extra investment as well as potential penalties from its failure to deliver the highways repair service.
It said it was looking to ‘withdraw’ from or renegotiate the 'onerous' contract with Birmingham.
The details were revealed in the latest financial report from parent company Ferrovial.
The report stated: “The company has reassessed its forecasts regarding the level of penalties and deductions, given the stance that the council has been seen to adopt during recent months, when it has applied penalties and deductions in extremely high amounts.
“All of this has led the company to set aside additional provisions in the amount of £237 million Euros (£209m) as an onerous contract.”
It said the sum was on top of money set aside last December to cover the costs.
The report added: “The company continues to focus on improving contracts with low rates of return, and on withdrawing from non-profitable contracts.”
Amey has declined to comment further on what that could mean for the Birmingham deal.
Under the 25 year PFI contract, Amey is responsible for looking after 1,550 miles of road and pavement until 2035.
The contract included heavy investment in new street lights, the city’s tunnel network and resurfacing roads for the first five years, to bring all streets up to a basic standard.
Amey then has to keep them at that level for the next 20 years.
The news came after Labour retained control of the council at this month's local elections on a manifesto of giving in-house staff a preferred bidder advantage in tendering for future contracts.
That has no bearing on existing contracts such as the Amey deal but suggests the authority could be open to returning road repairs to the authority.
Under the contract, which is the largest Private Finance Initiative deal in local government, Amey has resurfaced 500 miles of road and 400 miles of pavement, replaced 42,000 street lights, upgraded traffic lights and repaired bridges and tunnels, including the Queensway tunnels , since 2010.
UPDATED statement from Amey
James Haluch, Amey’s managing director for highways, said: “In 2010 Amey embarked on a 25-year highways contract with Birmingham City Council. Since then, we have completed a comprehensive programme of investment as part of a major infrastructure initiative, which has seen considerable improvements to the highways network.
“We have resurfaced 500 miles of carriageway – over one-third of Birmingham’s roads – and over 400 miles of pedestrian footway. We’ve also replaced 42,000 street lights, and over half of the city’s traffic signal systems. This is one of the most capital intensive projects in Europe.
“In fact, in 2018, we are investing additional resources, on top of the funds already in place to manage and maintain the network, to accelerate repairs after what has been an unprecedented winter.
“The ongoing dispute with Birmingham City Council is related to the way in which this investment is allocated to deliver the best possible services and value for money across the city, and we are considering all the available options to help achieve this.
“In the meantime, we continue to deliver our essential service to the city to maintain the safety of the Birmingham roads, and play an active part in the wider local business community.
Meanwhile the Greater Birmingham Chambers of Commerce has backed Amey and urged a swift resolution to the dispute.
Chamber chief executive Paul Faulkner said: "The current condition of the roads is a pressing concern for local businesses.
“Amey is an active and positive contributing member of not only the Greater Birmingham Chambers of Commerce, but the wider business community within the West Midlands.
"They are one of the largest companies working in public and regulated sectors in the UK, employing over 2,000 people locally to keep the Midlands moving and maintain services used by local people every day."
He also praised the social and charity work carried out by Amey in the city, including its Homeless to Highways project.
