The Dawei mega project was touted as a way to encourage foreign investment in Myanmar as it emerged from decades of military rule, but it has been hit by numerous setbacks, including funding struggles and local opposition.

As well as a port, the long-delayed project around the southern town of Dawei aims to develop an industrial area of around 200sq km.

The committee in charge of the Dawei Special Economic Zone said Monday it had “lost confidence” in Italian-Thai Development (ITD) after repeated issues.

Announcing the cancellation, the Dawei Special Economic Zone management committee complained of “repeated delays, continuing breaches of financial obligations under the contracts and the concessionaires’ failure to confirm their financial capacity to proceed with development”.

The chair of the Dawei management committee Tun Naing said Myanmar would now look for new developers to invest in the projects.

ITD could not be reached for immediate comment.

The Bangkok-based firm had already scaled back its involvement in the project in 2013, while Japan has shown some interest in getting involved.