A project to build Hong Kong's largest film studio has been given the final go-ahead after more than a year of negotiations between a consortium of movie companies and the Government. Construction on the HK$1.15 billion Hong Kong Movie City will start in Tseung Kwan O by the end of the year and is due to be completed in 2004, according to Mona Fong Yat-wah, managing director of film production and distribution company Shaw Brothers. The state-of-the-art studio will have a floor area of about 700,000 square metres. Shaw Brothers, with a 35 per cent stake, and associate Shaw Property Holdings, with 37 per cent, are the biggest shareholders in the venture which will develop the studio. Both companies are controlled by Sir Run Run Shaw, the media tycoon and executive chairman of Television Broadcasts (TVB). Other partners in the Goldway Holdings consortium include Media Asia Group, Golden Recreation Investments, China Star Entertainment Holding, Mei Ah Film Production and Taiwan-based Jing's Production. The consortium was awarded the site in August 1998 and originally was to carry out the first phase of construction by the end of 1999. It acquired a nearby plot for expansion last September. However, the project stalled when the Television and Entertainment Licensing Authority asked the consortium to build a pyrotechnical special effects material store - a warehouse for explosive materials - for the local movie industry on the site. The consortium opposed the proposal on security grounds and considered giving up the project. Construction was postponed while negotiations continued between the parties. The Government eventually withdrew its request. 'We are going to invest HK$850 million in the construction work and HK$300 million in equipment and facilities. The funding will be financed by the shareholders,' Ms Fong said. Ms Fong - Mr Shaw's wife and TVB's deputy chairman - also confirmed for the first time that the 94-year-old Sir Run Run would retire and there was a need to look for a successor. However, she did not say when this would happen. 'We don't have detailed planning yet,' she said. Regional media analyst at JP Morgan, Kristian R. Jhamb, said the succession issue had long been an implicit overhang on TVB's stock, so a move to resolve these concerns was a positive step. However, he believed the market 'will be left in anticipation for some time'. 'This is only a public admission of something,' he said. There has been frequent speculation in the market over who will succeed Sir Run Run.