No need for bustitution, just send them around the other way.
You mean a commuter from Torbay to Exeter would be expected to get a train to Newton Abbot, then one to Plymouth, then one to Exeter via the LSWR route?
Such a diversion would not suit long distance passengers for Teignbridge, Torbay and the South Hams either.
Promoting the LSWR option as a suitable diversionary route for the 400,000 people in the above three districts doesn't work. They will still need buses, and a lot of them, during sea wall disruption. Most importantly it doesn't require sourcing buses during disruption. Something that isn't easy to arrange at short notice. We've seen in Bristol recently just how bad a supposedly properly organised bustitution service, long planned for the Filton Bank closure, can be.
A Dawlish Avoiding Line between Exminster and Newton Abbot, with the potential for a park and ride to serve Dawlish and Teignmouth, keeps all existing passenger flows rail served during disruption. It also allows for modest journey time improvements for Plymouth and Cornwall. Long distance trains can take the DAL route to Newton Abbot and beyond. Semi-fasts and locals can stick to a rationalised sea wall route.
The LSWR route has merit as a line to attract new business to the railways. For local services serving North and West Devon certainly. Alternative long distance services can also go that way if the business case stacks up. It should not however be costed on its suitability as a diversionary route during sea wall closures. That option does nothing for the existing considerable passenger numbers to and from Teignbridge, Torbay and the South Hams.
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