Talks are under way which could decide whether one of the world's largest business outsourcing firms keeps its regional headquarters in Bahrain.

Electronic Data Systems (EDS) says it has big plans for Bahrain, but everything depends on whether it services are retained by troubled Gulf Air.

EDS managing director for the Gulf Stephen Kent said the firm had plans to provide state-of-the-art services to banks and financial institutions and could in future help Bahrain's government implement e-border technology to secure the country's ports and airports.

But the scale of the company's expansion will be determined by whether it can hold onto its biggest client in the country.

The firm currently provides a range of services to Gulf Air through an outsourcing agreement with Sabre Travel Network Middle East and Kent said the airline was currently deciding on whether to renew the arrangement.

"The contract is up in February of next year and what we are trying to do is re-write that contract. Right now Gulf Air is struggling to decide whether they are going to give it to us and continue outsourcing, or whether they are going to in-source it all," he said.

"We feel it is not their core business. Most companies and most governments around the world are outsourcing things which are not their core business, and someone like us can do it cheaper and better because that's what we do day in and day out.

"They fly planes, we do information technology.

"We want to retain our Gulf Air contract and we have offered improved contractual savings to them and are willing to negotiate further.

"We are still working off prices developed in 1998 - with no raises, we have never asked for any more money - so 10 years down the road we are still working off the same cost base and we would actually reduce the cost more."

Kent said EDS was proud if its contribution to training Bahraini nationals, and its commitment to continue this practice.

"What we are very proud of is we have 153 people and 85pc of those are Bahrainis," he said.

"We are very proud of our Bahrainis and we have trained them to where they are as good as any Western team, be it in Europe or the US. We would put them up against any Western team - they are very good."

Kent said the company hoped to expand its business with Gulf Air.

"They are getting ready to bring their Oman worldwide call centre back to Bahrain and we would like to give them that service," he said.

"We would like to staff it up for them with Bahrainis and keep the same high percentage of Bahrainis. They are talking about having it back by May next year.

"We want to keep Gulf Air as a customer. Gulf Air has been a good customer and we want to stay in the region.

Bahrain is the headquarters for EDS and we want to maintain that business and even go further and invest more into the island."

However asked what would happen if the airline decided to in-source the services EDS currently provides, Kent was frank.

"They are our biggest customer in Bahrain and if that changes it severely limits whether we would keep Bahrain as our regional headquarters - we don't know yet what the effect will be," he said.

In the meantime the firm continues to press ahead with potential projects in the kingdom - which could include the construction of a state-of-the-art data centre for the Bahraini government

"Our core business is financial, that's where we started up years ago and Bahrain is going to be the financial capital of the Gulf. We see ourselves being a big player in that," said Kent.

"Hopefully we will get involved with the government with their e-borders, their border security.

"Part of that plan is that when somebody gets on a plane, all their information will be passed on to the next destination so they will know if there is anybody of interest on that plan