Dozens of bus and rail projects throughout Victoria were allegedly delivered at inflated prices over several years at the direction of Barry Wells, a project officer for the Transport Department and Public Transport Victoria, who faces accusations of serious corrupt conduct at the first public hearing of the state's Independent Broad-Based Anti-corruption Commission (IBAC).

The inquiry has heard Mr Wells and his colleague Albert Ooi set up a web of family-linked companies and used their positions within the department to award those companies contracts to complete projects such as bus stop and railway station upgrades. Other contractors also became involved in the allegedly corrupt conduct, the investigation heard on Tuesday.

Civil engineer Darrel Salter told the hearing he worked with Mr Wells on several projects, and was routinely told to inflate quotes by thousands of dollars, with the agreement the mark-up would go to Mr Wells.

"So let's take an example," counsel assisting IBAC, Ted Woodward SC, asked Mr Salter. "You would ring him and say, 'I reckon that job will cost - I'd charge $6000 for that job'?"

"Yes," Mr Salter said.

"Then Mr Wells would say what?" Mr Woodward asked.

"Make it eight and put that amount in as a quote," Mr Salter said.

The total value of the mark-ups at one company at which Mr Salter worked, Tactile Australia, totalled just over $180,000, the hearing was told. The largest mark-up was $43,612 for a project in Gippsland, although Mr Salter said he could not recall the project.

Mr Salter claimed over and over that he could not remember key details, but when pressed, revealed how Mr Wells directed him to inflate the quotes for platform upgrades at several stations along the Shepparton railway line.

"I'm pretty sure Barry said, 'Add $10,000 to each of those rail jobs and submit that as your quote'," he said.

The arrangement was extended to Mr Salter completing work at no charge on Mr Wells' home in Romsey, north of Melbourne, including building a shed on the property that housed Mr Wells' greyhounds. The works cost Tactile Australia about $95,000, a spreadsheet presented at the hearings showed.

"Generally, most of my clients I do free work for, just to keep in the good books with them," Mr Salter said. "I felt that if I charged him it would have been deemed as a negative."

It was alleged on Tuesday that public money was also used to pay for a weekend away at The Esplanade Resort & Spa at Lakes Entrance in 2009, attended by Messrs Wells, Ooi, Salter and others, but without their partners.

"We were going up because we had work up there; I think it was Bairnsdale train station ... it was to go up and look at that and have a good time while we were up there," Mr Salter said.

He said he understood Mr Wells had taken care of payments on the weekend away, using department money from marked-up public transport projects.

Mr Wells and Mr Ooi are accused of awarding businesses that they established contracts valued about $25 million, between 2006 and late 2013. It is alleged they made more than $3 million profit from the corrupt deals, and spent it on lavish gifts including a piano and jet skis.

The investigation, called Operation Fitzroy, is IBAC's first public hearing since the commission was established by the Napthine government. It will continue for three weeks, with the possibility of further hearings beyond then if needed.