As I see it there are two views on this forum with regards to the cost of the IEP contract:
- IEP will cost so much money that the likes of First will make a loss on all its rail businesses because of it
OR
- although IEP isn't as cheap as the AT300 contract (and is more expensive than leasing 40 year old trains which have less capacity than the new trains and which will need work to be done to make them usable post 2019) it's not as disastrous as some may suggest and are pointing this out.
That second one is a whole lot different a view than the IEP contract is cheap/good value for money. However, as most people who fall into the first camp often suggest alternatives which wouldn't meet the capacity demands without being longer (so any future capacity works will cost more/need to happen sooner), which is why those in the second camp point out that the cost per seat can have a lower proportional cost than the cost per coach (i.e. 88 seats in a coach costing £2 million is broadly the same cost per seat as 76 seats in a coach costing £1.7 million).
Finally the IEP contract also pays for the works to allow the 26m trains to run on the network, some of which (such as electrical supply improvements to the ECML) would have been needed even if 23m stock had been proposed.
My take is slightly different! If one assumes that a PFI/PPP-type contract was the way to go (which I dispute) the major mistake that the DfT made was to combine two contracts (a) to design, develop, manufacture and operate the trains for 27.5 years including the design, build and operation of the maintenance depots and (b) raise the finance to pay for (a). This means that nobody knows whether the deal Agility Trains made to raise the money was the best deal possible at the time for all time. It is also uncertain whether the train design and pricing was the best obtainable as the DfT didn't get other quotes after the design had been changed from head-end power to distributed power.
One hopes at least that there is a clause in the contract which allows for a re-financing deal at some stage as things will certainly change at some point in the next 27.5 years. Agility Trains could get a cold and back out (after paying some penalties) or the DfT could find that the Train Service Provision payments are well out of kilter with leasing costs of similar trains.
As, under current conditions, it looks as if the Train Service Provision payments for a given number of seat-miles will be higher than for those obtained under the conventional deal with the ROSCO, it would seem certain that no more coaches or trains will be purchased under the IEP contract. Any further trains will be purchased by a ROSCO, especially as the DfT seems more likely to want to stay out of train procurement after the critical National Audit Office report on the IEP and Thameslink programmes.
The GW and East coast franchisees will not lose money in operating the trains procured via the IEP. The franchise terms will allow for the higher outgoings and the effect will be that the premiums paid by the franchisee will be lower than they could be.
I am sure that Hitachi have built a train which will meet the requirements of the specification written by the DfT. Whether the DfT, being at least a couple of layers removed from the fare-paying customers, have specified a train that these customers, and indeed the TOCs, would have chosen is moot.
As to your final point. My understanding is that the IEP contract did not cover the cost of way and works (apart from the maintenance depots) but these were included in the CP5 settlement between the DfT and Network Rail.