It had been the policy of Merthyr Council for a number of years to subsidise uneconomic but socially necessary bus services, but, in 1986, the enactment of the 1985 Transport Act meant that these policies could no longer continue and required the Council to set up a private company, which it did so under the name of Merthyr Tydfil Transport Ltd, and, although it retained the majority shareholding, it effectively ended over 60 years of municipal transport in the Welsh borough.
Initially the new company appeared to be in a healthy position as it ran all local services, although the longer services were now operated by National Welsh (successor to Red & White Services), and the economies made in the run up to de-regulation had made the company profitable.
The private hire side of the company was quickly expanded and the fleet brought up to date by the addition of a number of leased vehicles. A new livery of white with two bands in differing shades of blue was introduced.
A small loss was recorded in the financial year to April 1988, but by the end of the next financial year this had risen to over £¼ million.
This prompted the Borough Council to offer the company for sale and it was purchased by a consortium of local independent operators under the name of Evans Parfitt Holdings.
On the 5th June 1989 National Welsh introduced a number of competitive services in the borough, which affected the finances of the company further. In retaliation Merthyr Transport introduced services into National Welsh territory.
Merthyr Transport continued to operate services for the benefit of the public, which included many that were loss-making, pushing the company further into the red. Eventually, in July 1989 the administrators were called in.
The directors implemented a rescue package, but losses were still in the region of £15,000 a week.
An offer to purchase the company by local independents Evans and Jones was withdrawn on the 15th of August and the company ceased to trade with immediate effect, bringing to an end over 64 years of Merthyr Tydfil Transport.
The vehicles on the lease were returned and the remainder of the fleet was purchased by National Welsh, who immediately sold the vehicles on without operating any of them.
This history covers the period of operations of Merthyr Tydfil Transport, which effectively commenced on 26th October 1986 with the enactment of the 1985 Transport Act (de-regulation) and in preparing this history reference has been made to the following sources;
Merthyr Tydfil Transport (Roy Marshall, Buses No. 419, Feb. 1990); PSV Circle Fleet History PG3 (1980); Buses (various editions) 1986-1989.