On 22 December 2004, the Government of Kerala assigned the Delhi Metro Rail Corporation (DMRC) the task of preparing the detailed project report (DPR) for the Kochi Metro rail project. It was expected to start by 2006 and complete by 2010. But the project was delayed because the Central Government expressed serious doubts about the economic viability of the project.[9] The Kerala government had sought the Centre's assistance for the project to be built on the lines of the Delhi Metro project in terms of funding. The Centre refused this request.[10] The Union Government was in favour of implementing the project in public–private partnership (PPP) on the build-operate-transfer model,[11] ruling out its own financial involvement. The Ministry of Urban Development (MoUD) and the Planning Commission were also against government investment in the project, and refused to accept it as a project in line with the Delhi and Chennai metros. The political rivalry between the Left Democratic Front (LDF) government in Kerala and the United Progressive Alliance (UPA) government at the Centre was a major reason for such developments and the slow down in the project.[12] The LDF wanted it to be in public sector, which was not accepted by the Central Government. The victory of the United Democratic Front (UDF) in the 2011 Kerala legislative assembly elections, changed the scenario in the state[13] and it was decided that the Kochi Metro would follow the Chennai Metro and Delhi Metro models, and would be implemented on a joint venture basis, with investments by the Central and State Government. A Cabinet decision was taken to form a special purpose vehicle (SPV) called Kochi Metro Rail Ltd. (KMRL) as per orders from Planning Commission and the Union Government for the implementation, operation and maintenance of the metro project.
On 22 March 2012, the Public Investment Board (PIB) gave clearance to the Kochi Metro project. With PIB recommendation, the project proposal would go to the Union Cabinet for the final approval.[14] It was decided that the contribution from the Union Government would be 20.26% of the total project cost which works out to be 1002.23 crore (US$150 million).[15] On 28 March 2012, at a KMRL board meeting, the decision was taken to officially entrust the Kochi Metro rail project work to the DMRC. The meeting also finalized the number of metro stations on the line as 22, instead of the earlier proposed 23.[16][17] On 3 July 2012, Union Government gave final clearance to the project. The decision was announced after the cabinet meeting in New Delhi. Addressing media persons, then Managing Director of KMRL, Tom Jose said, "Now we will sit down with our valued partner, DMRC, and chalk out the way forward, obtaining advice and guidance from former DMRC Chief, E Sreedharan. We aim to complete the project within a span of 3 to 4 years." [18]
On 14 August 2012, the state government reconstituted the Board of Directors of KMRL. Power Secretary Elias George was appointed as the new Managing Director, replacing Tom Jose. It is believed that Jose's differences with Sreedharan led to the decision.[19][20] Chief Minister Oommen Chandy stated that it was part of administrative decision. The rest of the board would be Chief Secretary K Jayakumar, Finance Secretary V P Joy and Water Resources Principal Secretary V J Kurian.[21] The Central Government's nominees are Union Urban Development Secretary Sudhir Krishna as the ex-officio chairman of the KMRL Board, S. K. Lohia, Officer on Special Duty (Urban Transport); Jitendra Thyagi, Director (Works) of the DMRC; D. D. Pahuja, Director (Rolling Stock, Signalling and Electrical) of the Bangalore Metro Rail Corporation (BMRC) and A K Gupta, Additional Member (Works) of the Railway Board.[22] On 7 September 2012, the State Cabinet decided to induct the Ernakulam District Collector into the director board of KMRL. The move is expected to expedite land acquirement for the project and also pacify complaints KMRL was sidelining the efforts of the district administration. The first meeting of the reconstituted board was on 11 September 2012.[23]