HASANKEYF, Turkey—A consortium of German, Austrian and Swiss insurers has pulled export credit coverage of a controversial dam project, citing concerns that authorities were not adequately protecting the people and historical sites in southeastern Turkey.

Turkish authorities failed to meet a July 6 deadline to comply with requirements assuring that the Ilisu dam project would have a minimal effect on the people, environment and ancient archeological sites, Zurich, Switzerland-based Swiss Export Risk Insurance, one of the project insurers that also is government-run, said in a statement.

Swiss Export Risk Insurance provided coverage of 225 million Swiss francs ($207 million) to four Swiss engineering companies involved in the project.

Controversy has surrounded the €1.1 billion ($1.54 billion) project since construction began near Hasankeyf, Turkey, in 2006. Opponents have argued that flooding to create a reservoir holding 10.4 billion cubic meters (13.6 billion cubic yards) of water could destroy archaeological treasures and force resettlement of tens of thousands of people.

Plans had called for the dam to be completed by 2013. It is part of the Southeastern Anatolia Project, a program to provide irrigation and power to the basins of the Euphrates and Tigris rivers. The project aims to build 22 dams, 19 hydroelectric power plants and irrigate 1.7 million hectares (4.2 million acres) of land.

Andritz A.G., a Graz, Austria-based engineering firm involved in the Ilisu project, said it regretted insurers’ withdrawal but plans to continue the work if Turkish authorities go ahead with the project.

“It is very unfortunate that the intense efforts Turkey has made in the past months to implement the accompanying measures in the environmental, resettlement and cultural areas did not receive adequate recognition,” Andritz President and Chief Executive Officer Wolfgang Leitner said in a statement.