I agree it doesn’t appear to be value for money, but TfW need to justify the horrific expense of the tram conversion of the majority of the valley lines.
I thought Queen Street to Cardiff Bay was the only part of the existing ValleyLines infrustructure undergoing full tram conversion of the infrustructure, with the rest expected to retain heavy rail signalling? I don't think any 750v DC OHLE is currently planned either, with the 398s expected to launch with 25kv and battery only.
It's the first phase of a much bigger scheme, if it comes to fruition.
In which case construction shouldn't start until it's fully funded. Otherwise it's a white elephant.
I think there is something to be said for incrementally
building something big in smaller, afordable, chunks myself. Delivery of a huge project (like HS2 or the full SE Wales Metro) will take a number of years anyway and that gives time for inflation to run faster than you budgeted for and you find you don't have enough money left to finish the project anyway (like the Ebbw Vale branch capacity project for Ebbw Vale - Newport which was unable to deliver in full). Plus you're even more unlikely to be able to fund a big budget project without a very big loan, in which case you've done yourself a mischeif in future years as now you're losing a proportion of revenue which could otherwise have gone in the investment pot to paying the interest on the debt.
What you do need to do is have a clear idea of the overall vision in full before you start and make sure your detailed designs for the early phases accomodate the rest. This is the issue I have with HS2 - they didn't have a sufficently long-term vision for public transport across GB as a whole and as such the whole of Birmingham Curzon Street station is potentially abortive work.
Unfortunately, there are presumably some things - like depots - that have to be built big enough from the start and a minimum viable quantity of tram-trains to justify building that depot. Hence the class 398s spreading their wings across the Treherbert, Merthyr Tydfil and Aberdare (TAM) routes where tram-trains aren't needed (and, in my opinion, far less appropriate than a uniform fleet of 756s across all but Coryton to Cardiff Bay would have been).