As the equipment is newer and it's replacing very old, I would expect a reduction in running costs.It’s a lot when it doesn’t anywhere near cover it’s operating costs and these upgrades presumably increase running costs
As for covering operating costs, I couldn't say. 1.5m ticket sales a year for a small stretch of track, a few trains and staff doesn't suggest to be something terrifically unviable.
More to the point, do we run things and invest in things only if they ever "cover their costs"? Or should it not be recognised in societal terms that some things are worth paying for? Luxembourg has today announced that public transport will soon be free at the point of use.