JOINT VENTURE AGREEMENT

      CalEnergy Company, Inc. ("CE") and Kiewit Diversified Group
Inc. ("Kiewit") each recognize the unique strengths of the other
Party and hereby form a Joint Venture to develop, construct, own
and operate power projects internationally as follows:

Strengths:                    CE brings power project development
                    expertise,                 power project
                    financing expertise, financial wherewithal,
                    power project operational expertise, broad
                    knowledge of the international power markets
                    and knowledge of the specific international
                    power project opportunities available.

                                   Kiewit brings infrastructure
                    development expertise, financial wherewithal,
                    coal mining expertise, and a broad knowledge
                    of the power markets internationally.

Power Projects:          Each Party has the right of first
                    refusal to pursue through this Joint Venture,
                    all build, own and operate or build, own,
                    operate and transfer power projects
                    identified by the other Party or its
                    affiliates outside of the United States
                    except those in which (i) the Joint Venture
                    could not acquire a controlling interest in
                    the equity, (ii) bid constraints would
                    effectively prevent Kiewit's or CE's
                    participation, or (iii)  participant,
                    contractor or partner constraints would
                    effectively prevent Kiewit's or CE's
                    participation.  The right of first refusal
                    covers all international power project
                    development and bid opportunities, but does
                    not cover (i) any projects in the
                    construction or operating stages or (ii)
                    direct or indirect acquisitions of
                    development stage projects (subject to the
                    following sentence), or (iii) acquisitions of
                    entities owning projects in the construction
                    or operating stages which also own
                    development stage projects.  Notwithstanding
                    clause (ii) of the foregoing sentence, if the
                    acquisition is an acquisition solely (i) of a
                    project or projects in the development stage
                    or (ii) of an entity or entities owning a
                    project or projects in the development stage;
                    and in either case (i) or (ii) the aggregate
                    costs incurred on such development stage
                    project or projects does not exceed $250,000
                    at the date of the acquisition, then the
                    right of first refusal shall cover any such
                    acquisition.

                                   Each Party shall notify the
                    other Party of any power project subject to
                    the right of refusal as soon as such Party
                    believes that such project may be subject to
                    the right of refusal.  If the Joint Venture
                    does not promptly elect to pursue the
                    identified power project, either Party may
                    pursue the power project separately.

Development Manager
& Development Costs:     The Parties shall share all project
                    development costs equally.  Development costs
                    shall only be incurred by, or at the
                    direction of, CE as the Joint Venture
                    Development Manager and shall include all
                    development costs incurred after a power
                    project has been identified and offered to
                    the Joint Venture until a Party declines to
                    participate in such project or a Party or the
                    Joint Venture or a Project Entity abandons or
                    transfers its interest in a project or a
                    Party is otherwise required to discontinue
                    its participation in a project.  Development
                    costs include out-of-pocket, third party
                    expenses incurred by the Parties in
                    furtherance of development of a power project
                    as well as the actual cost associated with
                    employees of the Parties who perform work to
                    develop a power project, in each case at the
                    direction of the Development Manager.

                                   In no event shall the
                    reimbursable costs for employees be credited
                    in excess of the actual fully burdened cost
                    (as mutually agreed by the Parties) for the
                    actual time period involved by such staff in
                    Joint Venture development activities. It is
                    anticipated that CE employees will perform a
                    majority of the development activities.
                    Kiewit shall have the ability, however, to
                    dedicate up to one full-time equivalent
                    employee to Joint Venture activities, subject
                    to agreement by the Parties as to appropriate
                    time commitment and cost reimbursement
                    arrangements with respect thereto.

                                   Each Party shall submit bills
                    (and provide all reasonably requested
                    supporting documentation) for such
                    development costs on a monthly basis and each
                    Party's share of such costs shall be payable
                    within 30 days of submission of such bills.
                    Semiannually, the Parties shall review and
                    reconcile any development costs incurred
                    hereunder. Verified development costs shall
                    be recovered at project financial closing
                    unless converted to equity or subordinated
                    debt in the projects.

Development Fee:    CE shall be entitled to a Development Fee
                    from the applicable Project Entity equal to
                    1% of the combined debt and equity necessary
                    to finance any project, exclusive of amounts
                    to finance or reimburse the costs of
                    exploratory drilling.  This fee shall be
                    payable (subject to prior reimbursement of or
                    credit for all development expenses for the
                    applicable project and to any Development Fee
                    deferral or payout conditions required by
                    applicable project financing entities) at the
                    full release closing and funding of the
                    project debt and commitment of the project
                    equity contributions.  This fee will be
                    payable for all projects closed after January
                    1, 1997, except for any further units at
                    Dieng, Indonesia and provided that the fee
                    payable for any units at Patuha or Bali,
                    Indonesia shall be limited to .5%.

Management
Committee:                    The Parties shall establish a
                    management committee to be comprised of two
                    representatives of each of CE and Kiewit, who
                    shall act as agents of the parties appointing
                    them, to oversee and direct Joint Venture
                    management level decisions. Management
                    committee decisions shall be made by majority
                    vote.  In the event of a deadlock regarding a
                    particular project under development which
                    cannot be resolved by the good faith
                    negotiations of the Parties, (including the
                    failure to reach agreement on a turnkey
                    construction contract) either Party shall
                    have the right by 15 days prior written
                    notice to trigger a mandatory discontinuance
                    of both Parties with respect to the
                    particular project, in which case the
                    discontinuance provision below shall apply
                    and CE shall have the exclusive right to
                    pursue such project independently; provided
                    however, that the Parties shall negotiate
                    mutually acceptable deadlock resolution and
                    buyout provisions, which may vary from the
                    foregoing provision as part of the
                    organizational documents for each Project
                    Entity.  Each management committee shall have
                    meetings not less often than quarterly.  The
                    Development Manager shall prepare, and the
                    management committee shall approve, and
                    review as necessary, annual budgets for Joint
                    Venture activities.  Day to day operational
                    decisions relating to the Joint Venture, as
                    well as individual projects and Project
                    Entities shall be made by the Development
                    Manager.

Project Entity:          After a power project has reached an
                    appropriate stage of development, CE shall
                    endeavor to create a Project Entity (e.g.,
                    corporation, limited liability company,
                    partnership), which shall be reasonably
                    acceptable to both Parties, to undertake the
                    financing of such power project.  The Project
                    Entity organizational documents shall reflect
                    the equity participation of the Parties and
                    the fact that CE shall act as the managing
                    general partner or in an analogous operating
                    or managing role for such Project Entity,
                    subject to mutually acceptable management or
                    shareholder approval rights in favor of
                    Kiewit.  The provisions set forth in this
                    Joint Venture Agreement relating to the terms
                    and conditions of each Project Entity may be
                    varied by mutual agreement of the Parties; in
                    the event of any conflict between this
                    Agreement and any agreement relating to a
                    Project Entity, the agreement relating to the
                    Project Entity shall control.

Capital Contributions:   Unless otherwise negotiated by the
                    Parties, CE and Kiewit shall each provide 50%
                    of the equity or other sponsor-provided
                    funding required from the Parties for
                    financing a power project developed by the
                    Joint Venture or a Project Entity.  If agreed
                    by the Parties and acceptable to project
                    lenders, equity contributions may be made in
                    the form of construction or engineering or
                    other services performed.  Development costs
                    may be considered equity contributions of the
                    Parties to the extent agreed by the Parties
                    and permitted by the applicable project
                    lender.  The Parties acknowledge that any
                    commitment by either Party to invest equity
                    will be conditioned upon obtaining acceptable
                    rates of return and other acceptable
                    provisions.

Profit/Loss/
Distributions:           All profits, losses and other
                    distributions (including fees and other
                    similar compensation) arising from Joint
                    Venture or Project Entity activities after
                    repayment of development costs (other than
                    profits and losses arising under separate
                    construction and operation and maintenance
                    contracts) shall be allocated 50/50 to CE and
                    Kiewit or otherwise in accordance with each
                    Party's equity contribution.

Operations &
Maintenance:             CE shall serve as operator of all power
                    projects developed by the Joint Venture or a
                    Project Entity under an agreement acceptable
                    to the Parties and project lenders which
                    provides reasonable oversight to the Parties
                    over operational expenses and activities.  CE
                    shall provide appropriate security (e.g.
                    letter of credit, guarantee, bond) reasonably
                    required by lenders or other third parties to
                    secure performance of its contractual
                    obligations as operator.  CE will be entitled
                    to reasonable cost recovery, overhead and
                    profit under such operating agreement.

Accounting:              As Development Manager, CE shall
                    maintain, on behalf of the Joint Venture,
                    records of development costs and such other
                    matters as are reasonably required in
                    connection with Joint Venture activities.
                    The records of the Development Manager and
                    each Project Entity shall be accurate in all
                    material respects and shall fairly present
                    the position and results of the Joint Venture
                    and each Project  Entity and shall be
                    prepared on an accrual basis in accordance
                    with U.S.A. generally accepted accounting
                    principles consistently applied.

Discontinuance:          Except for binding obligations under
                    executed contracts including construction or
                    operation and maintenance agreements, with
                    respect to any  project, either Party may
                    elect to discontinue its participation in the
                    Joint Venture or any project or Project
                    Entity by delivering written notice to the
                    other 15 days in advance of its
                    discontinuance provided that the
                    discontinuing party shall use all reasonable
                    efforts to ensure that such discontinuance
                    shall not be made in a manner which would
                    disrupt any near term pending proposals
                    and/or negotiations such that the remaining
                    Party is injured and cannot continue with the
                    proposal/negotiations.  Upon delivery of such
                    notice, the  Parties shall for no additional
                    consideration, execute appropriate
                    assignment, assumption, indemnity and release
                    documents which transfer, as of the date of
                    the date of discontinuance, to the remaining
                    Party (or an affiliate thereof as designated
                    by such remaining Party) all obligations and
                    rights in the respective project or Project
                    Entity or in all power projects previously
                    identified  in writing to the Joint Venture,
                    but not yet transferred to a Project Entity,
                    whichever is applicable.  Such
                    discontinuance by a Party shall be
                    immediately effective as an assignment of its
                    interest in any power project; however, the
                    discontinuing Party shall pay its share of
                    development costs incurred  by the Joint
                    Venture or Project Entity on or before the
                    date of discontinuance, although  such
                    expenses may come due later.  The
                    discontinuing Party shall be entitled to be
                    repaid its share of the development costs
                    with respect to any discontinued project out
                    of the construction or project financing
                    therefor, but only after repayment to the
                    remaining party (and any new equity
                    participants) of all development costs
                    incurred with respect to the Project.

Right of First Refusal:  Notwithstanding any provision of this
                    Agreement to the contrary, either Party
                    ("Selling Party") may sell or transfer its
                    interest in , any project or Project Entity
                    (but not the Joint Venture) to a third party,
                    provided it first notifies the other Party
                    ("Offeree Party") of the identity of the
                    prospective purchaser, assignee or transferee
                    and sends to the Offeree Party a copy of the
                    written offer, and provided further that the
                    Selling Party shall first offer to sell all
                    its interest in, any project or Project
                    Entity to the Offeree Party for the same
                    price, and on the same terms as those being
                    offered to the Selling Party.  The Offeree
                    Party shall have 90 days after receiving such
                    offer to accept it.  If the Offeree Party
                    does not agree to purchase the Selling
                    Party's interest in, any project or Project
                    Entity with the 90 day period set forth
                    above, the Selling Party may sell its
                    interest in , any project or Project Entity
                    on the terms first proposed in the written
                    offer sent to the Offeree Party; provided,
                    however, that no Party may transfer its
                    interest in, any project or Project Entity to
                    another unless the transferee agrees in
                    writing to be bound by the same terms and
                    conditions of this Agreement (as it applies
                    to such project or Project Entity) and
                    becomes a party hereto.

Compliance with Law:     In performing their respective
                    activities hereunder, each Party agrees to
                    comply with all applicable United States, and
                    other applicable laws.  In this regard, each
                    Party  agrees that neither it nor its
                    employees, agents or subcontractors shall
                    make any payment or give anything of value to
                    any government official to influence a
                    government decision, or to gain any other
                    governmental advantage for the Parties, the
                    Joint Venture, any project or a Project
                    Entity in connection with the activities
                    performed hereunder.

Assignment:              Except for assignments to affiliates
                    and assignments to lenders and others (which
                    each Party agrees to make as reasonably
                    required for project financing) and
                    assignments pursuant to the Right of First
                    Refusal set forth above, neither Party may
                    sell, transfer, assign or otherwise encumber
                    any portion of its interest in the Joint
                    Venture any project, or any Project Entity
                    without the other Party's prior written
                    consent.  For purposes of this Agreement
                    "Affiliate" of a Party shall mean a person or
                    entity controlling, controlled by or under
                    common control with the Party.

Nature of Joint Venture: The Joint Venture shall not be
                    considered, and this Agreement shall not be
                    considered to have formed, a partnership or
                    other legal entity.  Except for CE's rights
                    to incur project development expenses and act
                    on behalf of the Joint Venture as Development
                    Manager within the scope of this agreement,
                    unless otherwise agreed, neither Party shall
                    be the agent or representative of, or have
                    the power to legally bind, the other Party in
                    connection with the activities of the Joint
                    Venture, and each Party shall be severally
                    liable for any obligations to third parties
                    incurred in connection with Joint Venture
                    activities.

Term:                         The term of the Joint Venture shall
                    be 5 years; but the term may be extended by
                    mutual agreement of the Parties.  The Joint
                    Venture shall extend automatically successive
                    terms of one year at the end of its term but
                    only for the sole purpose of considering
                    identified power projects not yet rejected or
                    pursuing power projects for which a Project
                    Entity has not yet been formed.  The term of
                    each Project Entity shall be as set forth in
                    its organizational documents which shall
                    establish a term at least as long as is
                    required to complete the development,
                    construction and operation of its respective
                    power project.  The term of the Right of
                    First Refusal for any identified project or
                    Project Entity shall extend for a term equal
                    to the applicable Party's right to an equity
                    participation in such project or Project
                    Entity. Notwithstanding the foregoing, the
                    term of this Joint Venture shall terminate
                    upon the bankruptcy or dissolution of either
                    Party.

Cooperation:             Since this Joint Venture Agreement is
                    expected to continue for some time and both
                    Parties recognize that international power
                    projects can present unique challenges or
                    require special arrangements, the Parties
                    will attempt in good faith to negotiate
                    additional terms or modifications to this
                    Agreement in response to any such unique
                    circumstances which are encountered,
                    consistent with the intent of the Parties in
                    forming this Joint Venture.

     This Joint Venture Agreement has been duly authorized and
executed by each Party and is intended to be a legally binding
and enforceable agreement under, and governed by, the laws of the
state of New York, U.S.A.


Dated as of:  December 4, 1996



Kiewit Diversified Group Inc.                CalEnergy Company,
Inc.



     /S/                                          /S/
By:  Richard R. Jaros                        By:  David L. Sokol
     President                                    Chairman of the Board and
                                                  Chief Executive Officer





(Kiewit5.fin)