The more important impact is the denial of funds for other worthy projects (spent on finishing GW), the worsening of the BCR for all electrification projects, and the loss of confidence in NR's capability to deliver.
NR's solution, which is to complete the design much more thoroughly before starting work on the ground, is a recipe for projects not being started in the first place.
Would Adonis (or more importantly the Treasury) have approved the project if he had known the true cost and timescales?
The point about changes in the specification causing an increase in costs was understood by all parties.
At the time NR could borrow money from the financial markets and this was added to its debt. At the time of the Hatfield accident NR was permitted by the Government of the day to borrow the funds it needed rather than have the Treasury supply the money - this was because the Chancellor, Gordon Brown, did not want the Government's indebtedness 'on balance sheet' to increase because of national and international financial issues so he preferred an 'off balance sheet' solution. NR could borrow at very low interest rates because the Government had agreed to guarantee the debt.
Borrowing was institutionalised by the Office for Rail Regulation which adopted a concept called the 'Regulated Asset Base' which was the ratio of borrowings to the nominal asset value of Network Rail. As long as this ratio did not exceed a given value everything was hunky-dory. (Except for the ever increase part of the Network Grant from the Government which went into servicing this debt pile).
So - up the the time in 2014 when Network Rail's debt became part of the National Debt, NR could borrow happily to cover any cost overruns. This meant if the initial estimates were wrong - or the spec. changed -
it didn't matter, NR simply borrowed the money it needed. The DfT knew about it, the ORR connived in it and the Government set up the arrangement in the first place.
The reclassification of the debt closed this source of cash - and
this is now why the over-engineering and the cost overruns are now causing such pain.
It's not simply due to incompetence on NR's part, it was working within the limits of the structure set for it. If anything the roots of the problems lie with Gordon Brown's decision to permit NR to borrow on the open market and the institutional structures set up to support it. This meant that NR floated away from the real world of costs and returns as more money could easily be borrowed - with the effect that checks on over-engineering, gold plating, or arguing about inappropriate standards, were not considered necessary.
The question you pose is only partially relevant. The original estimates were probably not far out -
if the electrification had been done on that basis. The point is - it wasn't and if NR had been limited to that amount of money the mission creep, the acceptance of inappropriate standards and all the rest would most likely not have happened. The question is to my mind, moot but equally if the calculations had shown that electrification would have been too expensive for the traffic carried then not electrifying would be the right answer.
Incidentally - let this be an awful warning for those that still consider that spending on HS2 and on NR comes out of two independent pots.
It doesn't.