Well more delay for a politically motivated project..
http://www.transportbriefing.co.uk/news/story?id=6137
Why the reckoned the railway would cost more is anyone's guess, certainly not in terms of materials. I note the busway uses 'During the past two years BAM Nuttall has laid 5,700 concrete guideway slabs, each weighing 30 tonnes, along the 12-mile route'
So that's 171,000 tonnes of concrete! A double track railway would have needed:
500 tonnes of ballast per mile
425 tonnes of rail per mile, to UIC 60kg standards
3500 tonnes of sleepers per mile
So around 53,000 tonnes of material for the project, or less than 1/3 of the materials for the busway. I don't believe track and ballast is any harder to lay than a concrete busway.
Sure you would have needed a signalling system, but a simple 2 aspect system would have sufficed, maybe stop signals every 4 miles, providing a 4-9 min headway, costing no more than £25 million, which would have included a simple crossover at St Ives and connection to the mainline. I doubt any more than a 1/2 hourly service would have been needed by say class 170. The stations surely wouldn't cost much more than the bus stops, especially modular with pre-fab platforms.
The loads would have been so light it would have needed minimal maintenance over 40 years.