VAE – Sofia saved the production of railway switches in Bulgaria


VAE – Sofia Ltd. is a joint venture, registered on 30th October 1997. It was established by the Austrian company VAE GmbH, which holds 51% of the shares, and National Railway Infrastructure Company, which holds the remaining 49%. VAE-Sofia Ltd took over the equipment in the Switch Workshop, which was part of the already non-existent Sofia Railway Works.

VAE – Sofia Ltd was designed and established as a company, which produces and offers to the market the best-possible mix of price, modern solutions and quality of products. This mix can be implemented only by those producers which keep in line with the best world practices. Today VAE – Sofia produces switches and equipment for upper track structures, which was impossible for the pitifully outdated Switch Workshop of the ex-Sofia Railway Works. By the way, this workshop would have long gone into oblivion, as have the other 14 workshops in Sofia Railway Works, had it not been for the timely establishment of VAE – Sofia, which is the company that has now saved the production of railway switches in Bulgaria.

According to the two managers of the company – Yanko Kostov, Ph. Eng. D., Governor for Technical Matters and Production; and Mario Roznak, M.Eng.Sc., Governor for Financial Matters and Sales, the topmost priority of the company is to guarantee the timely and high-quality production of items necessary for the Bulgarian railway network, including switches, spare parts and components. Today, VAE – Sofia is in the position to produce the whole range of elements for the upper track structures, including switches, dilation facilities, brettel equipment, end buffers, etc. The company produces (currently only for export) certain much more complicated and important elements, which fully comply with European requirements.

The main challenges before the company can be grouped in two categories. The first category includes issues, faced by NRIC, which have direct impact on VAE – Sofia. The most serious issue is funding. This is an enormous issue which is valid on a nation-wide scale. An obvious option for new construction and the upgrading of track are the European funds. On the other hand, the lack of solutions for the funding issue is a consequence from a number of other unresolved problems, such as the lack of a clear and long-term definition of the parameters pertaining to the Bulgarian transport policy; the slow implementation of regulatory reform as regards the mechanisms for investment in the country; the largely bureaucratic procedures, the lack of all-embracing and clear decisions on the implementation of bidding procedures in each phase of the investment process.

The second category comprises the internal issues of the company – the need to accelerate the technological enhancement of production processes; personnel issues (the company has reached the conclusion that it would be easier if it organised itself the training of necessary experts); definition of labour norms and relevant remuneration, as well as insufficient production areas.

A major challenge for the company is the increase of production for the Bulgarian market. In the first years after the establishment of VAE – Sofia Ltd, orders placed by Bulgarian railways account for almost 100% of the company’s turn-over. Today, orders from the NRIC account for not more than 10% of the turn-over. This is the reason why the company opted for other projects in Bulgaria and it also produces switches for Northern Greece, Serbia and Montenegro, Croatia, Slovenia and Spain.

In spite of the changed environment, VAE – Sofia managed to increase its turn-over by almost four times in comparison with the first fiscal year of its existence. The objective is that production for the Bulgarian market should account again for the larger share of the company’s turn-over.

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