(Reuters) - South African logistics company Transnet has picked Grindrod to develop and operate a container handling facility at the Port of Richards Bay, it said on Thursday, seeking to expand capacity and improve port efficiency.

The project, with an estimated capital investment of 285 million rand ($15.7 million), would increase the port's container handling capacity from 50 000 twenty-foot equivalent units (TEUs) to 200 000 TEUs per annum, Transnet said, with the facility expected to become operational in 2027.

The port of Richards Bay, on South Africa's east coast, contains a dry bulk terminal, a multi-purpose terminal and a privately operated coal terminal.

Transnet has struggled to provide adequate freight rail and port services because of equipment shortages and maintenance backlogs after years of underinvestment.

($1 = 18.1079 rand)

(Reporting by Nelson Banya; Editing by David Goodman)