An idea wholly predicated on the idea that there's an inseparable barrier between LR and HR, and that train operations cannot pass across infrastructure owner/controller boundaries.
100m train-trams cannot run on the streets of Cardiff. They can get away with level crossings, but they cannot drive along city centre streets. The only practical way of adding brand new LR-dedicated platforms to Cardiff Central would be to do street running. If 100m sets can't run in the streets, and are going to run, then they're going to use the existing platforms. The doubled sets will act like slightly narrower versions of the Merseyrail 777s.
Option 1: Some passenger services around Cardiff are handed over to a LR operator. A few remaining services which depend slightly more on sharing the mainline are kept essentially as-is.
Option 2: All trains are kept essentially as-is.
These are the options available. Not going ahead with the LR work isn't magically going to improve the case for work on the lines that aren't covered. Because non-conversion means higher operational costs, the firm likelihood is that the remaining HR services would actually be worse without LR conversion.
I asked you how much of CASR spend consisted of renewals, and how much was the actual improvements. There is absolutely no point banging on about CASR if the expenditure was unavoidable. Unless significant amounts of money were spent deliberately and only so that certain HR-only improvements were possible, there's nothing to talk about.
You know why the South Wales Metro idea is so appealing to Cardiff Bay? Because they know the transport system in South Wales isn't currently good enough, and that HR is simply technologically and economically unsuited for the region. This isn't Lyle Lanley and a Monorail. There's nothing about the South Wales Metro which would make the people of the Randstad feel uncomfortable.
Governments have essentially unlimited ability to borrow money as capital. The problem lies in current expenditure, as borrowing to fund day-to-day spending on public services presents more problems. Why do governments have so much money available to plough into shiny new super-hospitals and council buildings, rather than the 'cheap' option of just refurbishing existing ones? Because that high upfront capital cost is justified by the operational savings later on. The savings are the return on investment for that initial capital. If there are lot of savings to be made, the return on investment is high. When ROI is high enough, it is economically more prudent for the government to borrow money now to take advantage of those savings.
It's not an ideological thing, it's something that is clear as day on spreadsheets and in budgets at all levels of government spending. The reason the bond markets worry about stereotypical left-wing governments is not the act of borrowing per se, but that this borrowing will not be financially prudent and will damage the economy and/or the government's ability to pay it back. The bond markets love it when governments borrow to efficiently build clear-cut good investments like new bridges, since they perceive it as actually improving the government's ability to pay loans back. The problematic thing for governments is that there's lots of spending opportunities which might be politically convenient, or even necessary, which don't result in the financial situation improving. Lots of shiny things various politicians or voters might like don't actually have a good financial case to back them.
The first 'extensions' of the LR system would be taking over existing HR services. If nothing is done, these services will continue running, and continuing to lose money. If the LR savings are more than the interest and opportunity costs of additional borrowing for the conversion/enabling works, then it will happen. The Treasury would do the sums and find out that it's simply a better idea to spend more money now than it would be to spend money every year indefinitely. For as long as LR provides good enough savings and efficiencies, that will be the case.