Very unfortunate if the line is to be closed for as long as seems to be the case. The schools may get used to using buses instead of trains - with serious revenue consequences for the railway.
1) Surely the compensation to ATW should be related to the costs / damages incurred offset by any savings generated i.e. loss of fares (if any), costs of buses, taxi for crew etc, verses savings on fuel, unit wear and tear / maintenance etc.
2) As an aside, how many traincrew are based at Pwllheli? I've often wondered how difficult / efficient it is to operate outposts such as these with only 1 or 2 trains based at a particular location. Similar to Mallaig, Fort William and Oban. If it is efficient to operate Pwllheli in mid Wales, why concentrate drivers at Carmarthen instead of outposts as Pembroke, Milford Haven and Fishguard?