Three Russian industry heavyweights, Eduard Pichugin, the CEO of Cinema Invest and founder of Kronwerk Cinema chain, the producer Sergei Selyanov of CTB production company, and the director and businessman Fyodor Bondarchuk will embark on Kino City, a project to build 122 cinemas across Russia.

There are currently around 1700 screens in Russia, across 700 theatres, 200 of which are multi complexes, the rest being one-screen facilities.

Given Russia's 142 million population and the size of the country, the lack of modern cinemas has been considered one of the biggest obstacles to Russia's otherwise booming film industry.

As Pichugin explained, 'In the early 90s Russian film industry was rebuilt from scratch by creating modern multiplexes. But because those were built in large shopping centres, it meant that only Russia's largest cities enjoyed this modern development. The rest of Russia was left with dilapidating Soviet theatres.'

The project aims to initially build cinemas in the 122 Russian cities with populations of between 100,000 and a million. The ticket prices will be lower than those offered by Russia's current main cinema chains, to suit the local market.

The project is planned in two stages, the first covering the 122 larger cities and involving the initiators' own money.

The first stage will cost approximately $405m (14.5bn Roubles), which according to Bondarchuk will involve a further three investors, not as yet disclosed.

The second stage would be subsidised by the Russian government and would see the venture extended to smaller towns with less commercial potential.

Government support

Kino City is currently in talks with the government to secure their involvement. Sources close to the venture say that cooperation is likely given Vladimir Putin's pledge to invest $117m (4.2bn Roubles) in the Russian film industry by 2010.

However the process is complicated by Russia's federal nature. Kino City will first need to secure planning permission from each local council before proceeding and before central government can be involved.

So far, 40 of the 122 cities in the first stage have already given Kino City their official permission, the remainder are expected to follow suit shortly.

Pichugin's team will start construction of the first 3-5 theatres this summer, and the first stage of the project is expected to be completed within the next decade.

However, the prospect of work commencing on the second stage of the project, which focuses on 1480 smaller Russian towns, is not that distant. Bondarchuk explained, 'I think it will take less than five years to get the second stage of the project on the roll.'

The venture, which Pichugin has been developing for the past two years, was conceived with not only a commercial, but also a social goal.

Pichugin added, 'This project is very useful on so many levels. Apart from the fact that the local work force will be employed to construct the complexes, which is invaluable to the economy in times of crisis, the cinemas will carry a further social role.'

'We are now discussing with the government the possibility of using their space communication services at concessional prices, firstly to provide internet for our theatres and secondly to transmit video content,' said Pichugin.

If fully realised the venture would stretch from Russia's western borders all the way to Kamchatka, Russia's furthest Eastern region.