Created in significant changes to the public service enacted by Jeff Kennett after he was returned as Premier of Victoria at the 1996 state election, the DOI oversaw a variety of functions until its abolition in 2008.
Because privatisation had left the DOI with little experience of major project procurement, it allowed companies tendering for the RFR works packages considerable freedom in determining how to meet travel time targets set by the state government, and used the expertise of external consultants to assess the suitability of bids.
[11] The Victorian Ombudsman began a major investigation into DOI staff and processes in 2002 after a series of requests for documents made by the Opposition and journalists under freedom of information laws were delayed or denied.
[12][13] Several DOI projects commenced under the Bracks government were criticised by the Auditor-General in a 2004 report, which found the Department had planned and managed them poorly, leading to significant cost blowouts.
VicRoads, although nominally under the control of the Department, was the only transport agency reporting directly to the minister, and the road corporation also maintained significant informal influence at all levels of government.
[18] In 2007, after a significant rise in metropolitan rail patronage went unmatched by service increases, the Department's complex structure without obvious accountability for public transport was again criticised.