Deepening concerns are currently echoing through the Department of Excise over the conduct of two key officials: Retired Naval Commodore M.B.N.A. Premaratne—appointed as the Commissioner General of Excise by President Anura Kumara Dissanayake with a strict mandate to eradicate revenue leakages and corruption—and Nihal Premalal, Director of the Revenue Authority.
These apprehensions are mounting against the backdrop of long-standing criticisms and damning audit observations regarding India-based Madras Security Printers (MSP), the entity responsible for the secure sticker and digital track-and-trace system for liquor bottles in Sri Lanka.
Mr. Premaratne assumed duties as the Commissioner General of Excise in July 2025, following Cabinet approval of a presidential directive. His appointment was further bolstered by political backing, largely due to his wife, Professor Wasantha Subasinghe, being a prominent political figure. A fundamental expectation of his tenure was the maximization of state excise revenue and the systematic elimination of chronic revenue leaks within the sector.
However, a critical paradox has now emerged: the very officials appointed to reform the system are increasingly perceived as acting favorably toward MSP in their decision-making, despite the heavily scrutinized ecosystem surrounding the company.
A History of Controversies Surrounding MSP
MSP has managed Sri Lanka’s excise secure sticker and track-and-trace system since 2019. According to published Excise Department records, the company was selected through an international competitive bidding process under a Build-Own-and-Operate (BOO) model. Nevertheless, several state oversight mechanisms, including Parliamentary Committees and the Auditor General, have repeatedly flagged severe anomalies within this system.
A report by the Parliamentary Committee on Ways and Means previously highlighted that 200 scanners and 40 UV devices supplied by MSP remained unused. Officials cited that these devices were not programmed correctly upon delivery. The same report underscored the seizure of large quantities of illicit liquor bearing counterfeit secure stickers, pointing to a glaring lack of adequate legal enforcement regarding their proliferation.
Further compounding the issue, an investigative report by The Sunday Times in July 2026 revealed that official government documents had identified multiple operational failures within the MSP system, including printing defects, digital code readability issues, field verification app malfunctions, and poor data management. Most alarmingly, the report cited 2024 audit observations indicating that legitimate secure stickers issued by the Excise Department had been affixed to 8,446 illegally manufactured bottles of liquor.
A Skewed Playing Field
The most pressing concern today arises as the current agreement with MSP nears its expiration, prompting the government to float a massive new tender for the system.
In August 2026, the Excise Department called for international competitive bids for a new Security Features and Security Features Management System (SFSMS), once again proposed under a five-year BOO model. The estimated value of this prospective project stands at a staggering Rs. 6.375 billion.
Industry analysts have highlighted a critical vulnerability in this process: since the machinery and infrastructure of the existing MSP system are already established island-wide, any new competitor would face prohibitive capital costs to deploy fresh infrastructure. Conversely, MSP is positioned to offer a significantly lower bid by leveraging its pre-existing setup. Consequently, intense scrutiny is falling upon whether this new tender represents a genuinely open competition or simply a skewed process granting a natural monopoly to the incumbent supplier.
The Premaratne-Premalal Nexus
Within this context, the roles of Commissioner General Premaratne and Director Premalal have drawn severe internal criticism from both the Excise Department and political echelons.
Internal sources allege that, despite the glaring irregularities raised at both parliamentary and audit levels, these two officials have adopted a distinctly patronizing stance toward MSP in their official capacities. It has become a major point of contention across the industry that state officials—specifically mandated to protect national revenue—are making technical and administrative decisions that effectively provide a competitive edge to a private firm already mired in controversy.
The Rs. 60 Billion Question
The gravity of this situation is underscored by the monumental revenue losses allegedly linked to the secure sticker system.
In 2023, the Parliamentary Committee on Ways and Means estimated that approximately Rs. 60 billion in tax revenue had been lost due to counterfeit stickers. This financial hemorrhage resurfaced as a central focal point during the 2026 debates regarding MSP’s performance. Crucially, despite such severe indictments, professionals and the media are actively questioning how MSP continues to maintain a tactical advantage in the new bidding process.
Source: VoiceofSrilanka
