In urban infrastructure, stakeholders from different economic sectors are involved including real estate, knowledge economy sectors etc. There is a multiplicity and sometimes, divergence of interests. Hence, there emerges a need for collaboration of public and private sectors to address the common misalignment between them in the following ways:

• Investment requirements: Significant initial public subsidies might help kick-start the development. But long-term budget commitments – spanning over potentially different political mandates – may ultimately become a threat to the full delivery of the project and raise risks. Thereby, there is requirement of mobilisation of additional private capital.
• Convergence of different interests: Usually the public sector has some clear interests in developing, urbanising, regenerating, or optimising profits from either derelict or underperforming sites and brownfield areas. At the same time, for the private sector it means unlocking of new jobs and new investment opportunities in real estate and the possibility of associated investments in the local economy.
• Reduced risks: Risk allocation between partners needs to be at the heart of any collaboration between the public and private sector. While the government needs to take care of policy continuity, security of private investment, predictable timeframe of regulatory processes etc., the private sector undertakes socially comfortable cost recovery pricing of services and bears operational and constructional risk.
• Sharing of responsibility: While the government can bear the administrative and transactional cost of managing a collaborative project and wading through the complex bureaucratic procedures, the private sector can bring in efficiency gains from improved project delivery, operation and management, and access to advanced technology.
• Increase in rewards: Properly executed planning and development of a project also allows better screening of options, and helps in deciding appropriate project structure and choice of technology considering cost over the whole life cycle of the project. This expertise of the private sector provides relief to the public sector from the burden of the costs of design and construction.
• Complementary objectives: Stakeholders from business sectors require the levelling of knowledge gap regarding dynamics, pace and plurality of assets while the public sector seeks opportunities to create economic growth, boost innovation, tap into new technologies and invest in the future of the region.

Smart city solutions have emerged as a way forward to enable the convergence of stakeholders’ interests and to facilitate cooperation between investors for a more efficient and transparent use of resources and capital. The public sector may contribute by delivering the initial infrastructure rather than subsidising the development in later stages. Binding land use regulations should be set by the public sector from the early planning stages to ensure a wider shared value is delivered to the local community. Special public agencies or a department of local government could oversee relations with the developer over time. Some cities have successfully implemented public-private collaboration in wastewater management e.g. Alundur, Bangalore, Salt Lake (Kolkata) etc. as well as in urban road projects such as Mumbai Trans Harbour Sea Link Project, IT corridor project in Chennai, Hyderabad Outer ring road, Delhi- Gurgaon Expressway etc.