The Gujarat Government wanted to develop a ferry service network around the Gulf of Cambay with the intention of bringing the residents of this vast gulf closer together by making it easier to travel around it. Both passenger and RoRo terminals were therefore needed at the Dahej Port, where there previously had been no development.

Beckett Rankine carried out a Detailed Project Report at Dahej to determine the best site for the terminal. Three options were considered, but a jetty berth in the Narmada Estuary was recommended where the 12 metre tidal range meant that a large linkspan would be needed to access the ferries.

Dahej lies just north of the Narmada River Estuary in an area exposed to significant current flows. The site was considered beneficial to development as it was the narrowest point from which to cross the gulf and the surrounding area, which has since been developed into a large industrial zone.