New studios and a significant tax rebate mean that Hungary is challenging the Czech Republic as the hottest production hub in the region. Theodore Schwinke reports

The Hungarian capital of Budapest and its surroundings are packed with productions, despite a recent rise in the Hungarian forint against the dollar and euro. This is largely thanks to the new $124m Korda Studios, which boasts four sound stages, and a 20% tax rebate incentive for foreign film-makers who work with local producers.

With a 111-day shoot and a $72m budget, Universal's Hellboy 2: The Golden Army is the biggest film to shoot in Hungary. At least 60% of the film will shoot at Korda, where construction crews are continuing work on the facility. When completed, the studios will offer six stages, the largest of which will be 5,500 square metres, and what is being billed as the world's largest indoor water tank at 4,000 square metres. The facility stands in relative isolation, about 20km west of Budapest, and has considerable backlot space. A New York street set is being constructed for Hellboy 2, which should appeal to future productions.

However, with the increased capacity there is also limited crew available for each production and hotels book up fast.

'When you have a director like Guillermo del Toro, a high-profile film like Hellboy 2, and you have this year's Oscar-winning cameraman (Guillermo Navarro), it's an added magnet for good crew to wait for you,' says Chris Symes, executive producer of Hellboy 2. 'But what we're finding now is, when you need another few costume directors or whoever, the well has run dry.'

Korda managing director Laszlo Krisan admits that training more crews is essential: 'It's a kind of self-defence to create a new generation who will be good (enough).'

Korda's main competitor is the new Stern Film Studios in Budapest, which offers two stages - 2,240 square metres and 1,500 square metres - and is now housing Andrei Konchalovsky's $60m-$80m UK-US-Hungarian co-production The Nutcracker, based on the story made famous by Tchaikovsky's ballet. Like Korda, Stern has plans to expand.

Also in Budapest is the formerly state-owned MaFilm Studio, which has two stages - 1,000 square metres and 800 square metres. Mafilm hosted Copying Beethoven and Eragon last year and is looking for partners to invest in its backlot.

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