Can the Czech Republic retain its competitive edge when it comes to production' Theodore Schwinke reports

On paper, the Czech Republic's production service sector is looking healthy. Andrew Adamson is shooting Walden Media's The Chronicles Of Narnia: Prince Caspian at Barrandov's new 4,000 square metre stage, which also hosted Eli Roth's bloody horror Hostel: Part 2, while producer Iain Smith has chosen Prague Studios over Pinewood for Timur Bekmambetov's Wanted, starring Angelina Jolie and James McAvoy.

But Hellboy 2 and Bryan Singer's Valkyrie, starring Tom Cruise, which may have gone to Prague in the past, have moved to high-end facilities in Budapest and Berlin, respectively, where they can enjoy significant tax rebates. Hellboy 2 executive producer Chris Symes, who shot Alien Vs Predator in Prague, says: 'We're all coming to understand that Prague has become more expensive than Budapest. What tips it in Budapest's favour is the 20% (tax break).'

There is also no guarantee Barrandov Studios will host Bond 22, which shoots from December, even though Eon Productions and Sony shot much of Casino Royale in the Czech capital in 2006. Eon's Tony Waye says they have been approached by several studios in Eastern Europe but no decision has been made.

David Minkowski of Prague-based Still-king Films, believes 'the only way the Czech Republic will maintain its position as Hollywood's first-choice destination in this region is if we enact a tax break similar to Germany or Hungary'.