'The Hobbit' set to become most expensive film ever made

The film based on J.R.R. Tolkien’s “The Hobbit” is all set to become the most expensive film ever made. Sir Peter Jackson’s cinematic rendition, the two-part precursor to The Lord of the Rings biopic trilogy, will cost $500 million.

The entire three-part The Lord of the Rings – The Fellowship of the Ring, The Two Towers and The Return of the King – had cost $281 million in contrast. If all goes according to plan, the first part of The Hobbit will open in December 2012, with the second following a year later.

The Hobbit, to be shot in two parts because of its length, will cost almost $200m more than the costliest film to date, the third Pirates of the Caribbean movie. The film’s budget has skyrocketed due to several years of delays, many of which were caused by legal disputes.

The film has been beset with problems. Director Guillermo de Toro who was supposed to make the film quit in May after production delays. Jackson stepped in to pick up the thread from where he had left off with the earlier trilogy.

But there have been problems in New Zealand, where the bulk of the trilogy had been shot and which had made the best of the film both in terms of tourism as well as the domestic film industry. Recent films made in New Zealand include Avatar and X-Men Origins: Wolverine.

New Zealand Prime Minister John Key last week offered to mediate in the dispute between actors and producers of "The Hobbit" to ensure filming stays in the country. Australia’s Media, Entertainment and Arts Alliance (MEAA) had called for a boycott of the film over a minimum wage and working conditions for its members. The New Zealand Actors’ Equity is allied with the Australia-based MEAA. Jackson called the MEAA an "Australian bully boy."

"I would be very, very concerned if it moved offshore," he told Television New Zealand. "This is a NZ$3 billion ($2.2 billion) industry. It employs a lot of people. It's great for New Zealand. It's a great way for marketing New Zealand."

The film’s co-producer and co-writer Phillippa Boyens told Radio New Zealand that film industry players from Australia, Canada, Scotland and Ireland wanted to move on to a new location. Boyens said the dispute had damaged New Zealand's film reputation and "thrown doubt on how stable our industry is in terms of industrial relations."

Among those throwing open its doors to Jackson is Canada. Alberta's culture minister has already established contact with Jackson. Alberta is eager to become Middle Earth.