"but very difficult to govern how would you know if the £100 engine was bog standard or not ??"
The challenge buys the engines and seals them and them sells or as you have said hires them to any takers.
This would give a cheap entry level for the challenge. In between meetings the only requirement would be an oil change, at the end of the season just throw them in the bin. Don't forget these engines are designed to run for 1000's of hours with little or no maintenance.
Lets not compare this class (clone) with your normal racing prokart engine, that's not the point, the proposal is to allow a lower cost grid with just as much fun.
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