Often a project is overburdened with competing resources. Reduce administrative overhead. The team needs to be free of administrative duties so that the maximum benefit of their expertise is employed. Change the project leadership. A manager can suffer poor morale just like other team members.
Negativity makes it nearly impossible for the team to respond positively.
A team suffering from morale problems needs a charismatic leader who believes that the project will succeed. Improve communications among team and leaders. Redefine goals or scope so that the project is attainable with available resources. Find an alternative solution.