Poseidon's Carlsbad project cost is $700 million

Global Water Intelligence is an expensive (but worth it) source of timely and excellent analysis. This piece [$] caught my eye, and I quote heavily because it's gated for subscribers:

Poseidon Resources’ decision to apply for an extra $50 million of private activity bonds [see this post] caught my eye. It also seems to have captured the imagination of California’s media, but for quite different reasons. I was interested primarily because I am intrigued by how Poseidon is going to make a return that justifies the fantastic risks it has had to take on in order to get the Carlsbad project this far. It seems to me that the extra money is a sign that things are going well for the company.

The reason I think things are going well is because the construction costs are pretty well fixed at $360 million for the plant and the pipeline. The revenues are also pretty much fixed...

It seems to me unlikely that Poseidon has had to increase the amount of debt in the project from $480 million to $530 million simply because the debt has turned out to be more expensive than anticipated. The main reason why the cost of finance would rise would be because potential investors are worried about the level of risk in the project. If that were the case, it would be unlikely that Poseidon would be able to increase the amount they are borrowing. Rather they would need to be reducing the leverage in the project. In fact, it appears that the reverse must be happening: Poseidon is finding sufficient appetite in the market for exposure to the Carlsbad project, that it can increase the amount of debt, and reduce the amount of equity. For example it might have started with the assumption that it would need to split the debt and the equity 65-35, which would require $480 million of debt, but now it discovers that there is sufficient appetite in the market for Carlsbad private activity bonds to enable it to push for a 75-25 debt/equity split. Assuming that the total project cost is around $700 million, the total debt would then be $530 million.

Now this column is labeled as "speculation," but the analysis seems sound -- and interesting! But there are still two questions I've got...

• Where that $700 million is being spent ($360 million for construction and $340 million for... start up costs? buffers? political contributions? help!)
• Why nobody is talking about the project costing $700 million, since that's stated in a matter-of-fact way here. That matters, because those costs are going to get repaid, by someone, somewhere...

Your thoughts? Bottom Line: Although Poseidon's project may possibly make sense, I'd like to see a full financial accounting -- and so would Poseidon's customers!