Lots of questions to answer.
In the below TfW refers to Transport for Wales Rail Services (the train operator), and not Transport for Wales (the transport authority)
The provision of rail services in England by TfW is a reserved matter, ie DfT can instruct TfW regarding services that call at English stations. (It’s a lot more complicated than that, but that’s the simple version). So DfT could simply write to TfW and say ‘no’ to this proposal.
If more trains are needed, can DfT direct one or other of the TOCs to provide them, and if so agree to fund them if the extra revenue doesn’t cover the extra costs?
Yes, and if directing them would have to agree to fund them - the two go together.
Would TfW complain to ORR if WMT/GBR did that and lost revenue share, or does all that revenue across both TOCs go back to DfT anyway?
Revenue for TfW stays in Wales. TfW could indeed raise with ORR any proposal for new services that has the potential to harm their revenue, in exactly the same way as GWR have done. The main point is that rail revenue in Wales is rather small, so any revenue loss is relatively small.
Can one or other operator at their own discretion put on extra services?
No.
Can they offer dedicated fares?
Yes.
What happens if capacity is hitting limits?
Then Network Rail has to take a decision on the allocation of capacity, and if new / additional services are involved, then seperstely, ORR has to take a decision on access rights if they have not been agreed between NR and the relevant operators. Both those issues are in play here.
How does it work the other way around if say GBR decided to operate more trains Euston-Holyhead? There are arguments that more seats are needed on the North Wales coast, so a neutral might say it is more efficient that these are provided using longer trains which so happen to be on GBR trains rather than TfW branded ones. These are the kinds of issues I would expect GBR would be fully managing elsewhere, without cross boundary complications.
Stakeholders in Wales would be consulted, and the DfT would instruct the operator (eg Avanti).
The DfT absolutely hate someone else taking their revenue (because of the budgetary implications) so will have instructed GWR to object.
You will know better than I do, but I would have expected GWR to object off their own back without instruction on this one.
The key issue here is the combination of financial effect, promises to stakeholders, and the effect on punctuality and reliability. In my view it is likely to be the case that not all the extra services wanted in the Bristol area will fit. (extra services to Oxford, Wales, North Filton, Portishead, and some ). And even if you fit in everything you possibly can, punctuality and reliability will take a hit. There are some big trade offs to chase - revenue or performance? Delivering all that is promised with a big drop in performance, or make one or more stakeholders decidedly unhappy but keep performance stable? etc.
Who here would like to take that decision and how?