Nevertheless, Dutra's administration was criticized for its intervention on the public transportation system, what generated bad relations between the City Hall and the bus concessionaire companies, forcing the government to pay them an indemnification. After his term as mayor had ended, in 1994, Dutra tried the governorship for a second time. He obtained 35% of the votes on the first round and 47.79% on the second. He lost the office to Britto by a margin of less than 5% of the valid votes. In 1998, Britto tried the re-election and faced Dutra for a third time. Dutra's campaign focused on criticizing Britto's actions perceived as neoliberal politics, such as the privatization of the state owned telephony and energy companies. This time, Dutra won the election on second round by a small margin of only 97 thousand votes. Dutra's term as governor, from 1999 to 2003, was marked by the suspension of a deal established by Britto's administration concerning the opening of two car manufacturing companies in the state (General Motors and Ford). The deal included high tax exemption and flotation with interest rate below the market for the companies. The renegotiation proposed by Dutra was only accepted by GM. Other accomplishments of his administration include the creation of a State University and the introduction of the participatory budgeting at state level, following the previous experience of its implementation in Porto Alegre by his party. Suffering from a large defamation campaign, promoted mainly by RBS media conglomerate (Rede Globo's local affiliate), as soon as a corruption scandal involving the Workers' Party and the Jogo do Bicho erupted, and without the majority in the State Assembly, where he faced major defeats, Dutra was politically worn out near his term's end. As a result, Dutra's reelection campaign was rejected in the Workers' Party primaries, where then Mayor of Porto Alegre Tarso Genro was selected to represent the party. Genro would be defeated by a margin of 5% in the second round by Germano Rigotto from the Brazilian Democratic Movement Party. In 2002, Luís Inácio Lula da Silva was elected president, and appointed Dutra as Minister of Cities, a then recently created office. He would remain on this job until 2005, when Lula needed to reorganize the Brazilian cabinet to suit the Progressive Party in it. Dutra was then replaced by Márcio Fortes in a negotiation of the government with then President of the Congress Severino Cavalcanti.