You are assuming that the 120 new vehicles will be DMUs. However, the ITT permits the alternative of procuring 120 new unpowered carriages (the diesel locos to haul them would not have to be new). This option would have much lower leasing costs, given the likely very high unit cost of a small order for a new design of Stage IIIB compliant DMU to the British loading gauge.
Even though LHCS incurs high track access charges, might not the lower leasing costs make this overall the more attractive option to the TOC?
It has been widely reported that the cost lies with the uncertainty for the ROSCO and nothing to do with the availability of a suitable engine. The 6H 1800 R83p found in the Class 172 has already been upgraded to a Stage IIIb 6H 1800 R85. (and of course the IEP is also Stage IIIb from MTU/RR)
Now we have an invitation to tender confirming to the ROSCOs that the DfT/operators shall support an order for new DMUs the ROSCOs have enough certainty to order a product over its lifetime. Something like the turbostar platform is an ideal contender as design costs are well established and a compliant Stage IIIb engine is easy to find (After all the Stage IIIb directive has been in force since 1st Jan 2012!! Enough time for the manufacturers to design suitable engines). I am also sure due to the uniformity of the Hitachi range of AT products, the design of the AT-300 in accommodating a 'powerpack' for the Class 800 can be applied to an AT-100 or AT-200 for a regional DMU.
The issue has been the uncertainty the ROSCOs have faced in not being sure their brand new DMU shall be leased for its lifetime. The tender and the DfT are now saying, they support it.
There is also a lot of lobbying and consultations going on to see for further DMU orders as the realisation falls that electrification is not going everywhere and our current DMUs mainly date from the 1980s.