Russia is on target toproduce more than 160 feature films this year with an economic boom drivingproduction funding and an increase of 40% at the box office last year makingfilm production start to look attractive for local backers.

It also has heated up thedebate over the long stalled privatisation of state owned film studios.

Gorky Film Studios incentral Moscow will be the first to go on the block with the Russian governmentannouncing that it will be auctioned next month for a starting price of $4.4m.

One of Russia's oldeststudios, Gorky needs investment to upgrade its facilities if it is to keep upwith the standards that today's producers demand.

Lenfilm in St Petersburg isalso slated for privatisation later in the year. But Karen Shakahnazarov, who heads Mosfilm Studios which providesfacilities for 90% of Russia's feature film production, remains convinced thatfor the time being there is no reason to restructure the still-state ownedMosfilm.

Since taking over thestudios in 1998, Shakhnazarov has been able to upgrade the studios to a worldclass film production facility investing between $10 m and $15m a year for thepast five years from the studios own income including a new $10m filmlaboratory last year.

"We now have one of the bestproduction facilities in Europe," said Shakhnazarov. " Since we began upgrading only five years ago everything isnew. We have the latest of everything." Last year over 120 features were producedat Mosfilm including record breaking hit Night Watch directed by TimurBekmambetov and produced by Channel One and the sequel Day Watch isalready in post-production.

One of the biggest budgetproductions to shoot at the central Moscow studios over the past few months isNicolai Lebedev's $10m sci-fi fantasy Wolfhound produced by CentralPartnership.

Like Night Watch thefilm is based on a best selling Russian sci-fi novel of the same name. One of the innovations that has allowedsci-fi and fantasy films to begin to flourish is a new system created by studioengineers that links the whole post-production system through a single computernetwork.

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