LETTER TO THE EDITOR: A DISPUTATION BETWEEN THE AUTHORS AND THE REVIEWING EDITOR

摘要

Authors Bertisen and Davis are commended for their study of mine project capital cost estimation. They rightly point out that the estimated cost when compared to the actual cost errs usually by underestimating. They analyze the "undershooting" and propose a remedy and also suggest that the persistence of bias is intentional. They say that the estimating by project consulting firms, who do the estimating of the mine capital costs for investment banks, is manipulated in such a way to have the capital costs be less, and so have the NPV be positive, and when ranked against other competitive projects, their project will float to the top of the financing pecking order. A strong statement by the authors, but are their claims justified? Indeed, there are legal ramifications to these disputes, and implicit collusion between the engineering consultants and the project sponsor is suggested by the authors. This last matter is not discussed here.