Exhibit 10.38

                         AMENDMENT NO. 1

                             TO THE

                      EMPLOYMENT AGREEMENT

                             BETWEEN

                     CALENERGY COMPANY, INC.

                               AND

                       STEVEN A. MCARTHUR


     This Amendment No. 1 (the "Amendment") to the Employment
Agreement dated August 6, 1996 (the "Employment Agreement") by
and between CalEnergy Company, Inc., a Delaware corporation (the
"Company"), and Steven A. McArthur (the "Executive"), is entered
into as of April 16, 1997.

     WHEREAS, the Company and the Executive are presently parties
to the Employment Agreement; and

     WHEREAS, the Company and the Executive desire to amend the
Employment Agreement as set forth herein;

     NOW, THEREFORE, the Employment Agreement is hereby amended
as follows:

     (1) By adding the following sentences at the end of Section
4(c):

          "The Executive shall also be eligible to be paid other
          bonuses for each fiscal year as determined by the
          Chairman of the Board.  The Executive's annual
          incentive merit bonus, together with all such other
          bonuses paid or payable for the fiscal year (including
          any amounts for which receipt is otherwise deferred
          pursuant to a plan or arrangement with the Company), is
          referred to herein as `Annual Bonus Compensation.'"

     (2) By adding the following sentence after the last sentence
of Section 6(a):

          "The preceding sentence notwithstanding, if the
          Executive's resignation occurs upon or after a Change
          in Control, he shall not be precluded from accepting
          employment or providing services to Peter Kiewit Sons',
          Inc. or any affiliate thereof."

     (3) By deleting from the first sentence of Section 8(b) the
language following the parenthetical "(iii)" and replacing it
with the following:

          "commencing one month after the month of his
          Termination Date, 24 monthly payments each equal to
          1/24 of a sum equal to two times the average Annual
          Bonus Compensation payable to the Executive in respect
          of the two fiscal years immediately preceding the year
          in which the Executive's employment with the Company
          terminates (with any such year for which no bonus was
          payable included in such two year average as a zero)."

     (4) By deleting current Section 8(d) and inserting new
Section 8(d), to read as follows:

          "(d) If the employment of the Executive is terminated
          pursuant to subsections (ii) or (vi) of Section 7(a),
          all Performance Accelerated Stock Options ("PASOs")
          held by the Executive on the Termination Date will
          become vested and immediately exercisable on such
          Termination Date and shall otherwise remain exercisable
          for their term in accordance with the terms thereof."

     (5) By inserting immediately following Section 8(d) a new
Section 8(e) to read as follows:

          "(e) If the employment of the Executive is terminated
          for any reason after a Change in Control, then without
          further action by the Company, the Board or any
          committee thereof, the Executive may exercise any
          vested stock options (including vested PASOs) held by
          the Executive pursuant to existing procedures approved
          by the Stock Option Committee for cashless exercise, by
          surrendering previously owned shares, electing to have
          the Company withhold shares otherwise deliverable upon
          exercise of such options, or by providing an
          irrevocable direction to a broker to sell shares and
          deliver all or a portion of the proceeds to the
          Company, in any case in an amount equal to the
          aggregate exercise price and any tax withholding
          obligation attendant to the exercise."

     (6) By inserting immediately following Section 8 a new
Section 8A, which shall read in its entirety as follows:

          "Section 8A.   Certain Additional Payments by the
                         Company.

               (a)  Anything in this Agreement to the contrary
          notwithstanding, in the event it shall be determined
          that any payment, distribution, waiver of Company
          rights, acceleration of vesting of any stock options or
          restricted stock, or any other payment or benefit in
          the nature of compensation to or for the benefit in the
          nature of compensation to or for the benefit of the
          Executive, alone or in combination (whether such
          payment, distribution, waiver, acceleration or other
          benefit is made pursuant to the terms of this Agreement
          or any other agreement, plan or arrangement providing
          payments or benefits in the nature of compensation to
          or for the benefit of the Executive, but determined
          without regard to any additional payments required
          under this Section 8A) (a "Payment") would be subject
          to the excise tax imposed by Section 4999 of the Code
          (or any successor provision) or any interest or
          penalties are incurred by the Executive with respect to
          such excise tax (such excise tax, together with any
          such interest and penalties, are hereinafter
          collectively referred to as the "Excise Tax"), then the
          Executive shall be entitled to receive an additional
          payment (a "Gross-Up Payment") in an amount such that
          after payment by the Executive of all taxes with
          respect to the Gross-Up Payment (including any interest
          or penalties imposed with respect to such taxes),
          including, without limitation, any income taxes (and
          any interest and penalties imposed with respect
          thereto) and Excise Tax imposed upon the Gross-Up
          Payment, the Executive retains an amount of the Gross-
          Up Payment equal to the Excise Tax imposed on the
          Payments.

               (b)  Subject to the provisions of Section 8A(c),
          all determinations required to be made under this
          Section 8A, including whether and when a Gross-Up
          Payment is required and the amount of such Gross-Up
          Payment is required and the amount of such Gross-Up
          Payment and the assumptions to be utilized in arriving
          at such determination, shall be made by Deloitte and
          Touche LLP, or such other nationally recognized
          accounting firm then auditing the accounts of the
          Company (the "Accounting Firm") which shall provide
          detailed supporting calculations both to the Company
          and the Executive within 15 business days of the
          receipt of notice from the Executive that there has
          been a Payment, or such earlier time as is requested by
          the Company.  In the event that the Accounting Firm is
          unwilling or unable to perform its obligations pursuant
          to this Section 8A, the Executive shall appoint another
          nationally recognized accounting firm to make the
          determinations required hereunder (which accounting
          firm shall then be referred to hereunder as the
          Accounting Firm).  All fees and expenses of the
          Accounting Firm shall be borne solely by the Company.
          Any Gross-Up Payment, determined pursuant to this
          Section 8A, shall be paid by the Company to the
          Executive within five days of the receipt of the
          Accounting Firm's determination.  Any determination by
          the Accounting Firm shall be binding upon the Company
          and the Executive.  The parties hereto acknowledge
          that, as a result of the potential uncertainty in the
          application of Section 4999 of the Code (or any
          successor provision) at the time of the initial
          determination by the Accounting Firm hereunder, it is
          possible that the Company will not have made Gross-Up
          Payments which should have been made consistent with
          the calculations required to be made hereunder (an
          "Underpayment").  In the event that the Company
          exhausts its remedies pursuant to Section 8A(c) and the
          Executive thereafter is required to make a payment of
          any Excise Tax, the Accounting Firm shall determine the
          amount of the Underpayment that has occurred and any
          such Underpayment shall be promptly paid by the Company
          to or for the benefit of the Executive.

               (c)  The Executive shall notify the Company in
          writing of any claim by the Internal Revenue Service
          that, if successful, would require the payment by the
          Company of the Gross-Up Payment.  Such notification
          shall be given as soon as practicable but no later than
          20 business days after the Executive is informed in
          writing of such claim and shall apprise the Company of
          the nature of such claim and the date on which such
          claim is requested to be paid.  The Executive shall not
          pay such claim prior to the expiration of the 30-day
          period following the date on which he gives such notice
          to the Company (or such shorter period ending on the
          date that any payment of taxes with respect to such
          claim is due).  If the Company notifies the Executive
          in writing prior to the expiration of such period that
          it desires to contest such claim, the Executive shall:

          (i)   give the Company any information reasonably
                requested by the Company relating to such claim,

          (ii)  take such action in connection with contesting
                such claim as the Company shall reasonably
                request in writing from time to time, including,
                without limitation, accepting legal
                representation with respect to such claim by an
                attorney reasonably selected by the Company,

          (iii) cooperate with the Company in good faith in
                order effectively to contest such claim, and

          (iv)  permit the Company to participate in any
                proceedings relating to such claim;

          provided, however, that the Company shall bear and pay
          directly all costs and expenses (including additional
          interest and penalties) incurred in connection with
          such contest and shall indemnify and hold the Executive
          harmless, on an after-tax basis, for any Excise Tax or
          income tax (including interest and penalties with
          respect thereto) imposed as a result of such
          representation and payment of costs and expenses.
          Without limiting the foregoing provisions of this
          Section 8A(c), the Company shall control all
          proceedings taken in connection with such contest and,
          at its sole option, may pursue or forgo any and all
          administrative appeals, proceedings, hearings and
          conferences with the taxing authority in respect of
          such claim and may, at its sole option, either direct
          the Executive to pay the tax claimed and sue for a
          refund or contest the claim in any permissible manner,
          and the Executive agrees to prosecute such contest to a
          determination before any administrative tribunal, in a
          court of initial jurisdiction and in one or more
          appellate courts, as the Company shall determine;
          provided, however, that if the Company directs the
          Executive to pay such claim and sue for a refund, the
          Company shall advance the amount of such payment to the
          Executive, on an interest-free basis, and shall
          indemnify and hold the Executive harmless, on an after-
          tax basis, from any Excise Tax or income tax (including
          interest or penalties with respect thereto) imposed
          with respect to such advance or with respect to any
          imputed income with respect to such advance; and
          further provided that any extension of the statute of
          limitations relating to payment of taxes for the
          taxable year of the Executive with respect to which
          such contested amount is claimed to be due is limited
          solely to such contested amount.  Furthermore, the
          Company's control of the contest shall be limited to
          issues with respect to which a Gross-Up Payment would
          be payable hereunder and the Executive shall be
          entitled to settle or contest, as the case may be, any
          other issue raised by the Internal Revenue Service or
          any other taxing authority.

               (d)  If, after the receipt by the Executive of an
          amount advanced by the Company pursuant to Section
          8A(c), the Executive becomes entitled to receive any
          refund with respect to such claim, the Executive shall
          (subject to the Company's complying with the
          requirements of Section 8A(c)) promptly pay to the
          Company the amount of such refund (together with any
          interest paid or credited thereon after taxes
          applicable thereto).  If, after the receipt by the
          Executive of an amount advanced by the Company pursuant
          to Section 8A(c), a determination is made that the
          Executive shall not be entitled to any refund with
          respect to such claim and the Company does not notify
          the Executive in writing of its intent to contest such
          denial of refund prior to the expiration of 30 days
          after such determination, then such advance shall be
          forgiven and shall not be required to be repaid and the
          amount of such advance shall offset, to the extent
          thereof, the amount of Gross-Up Payment required to be
          paid."

     Except as provided herein and to the extent necessary to
give full effect to the provisions of this Amendment, the terms
of the Employment Agreement shall remain in full force and
effect.

     IN WITNESS WHEREOF, the parties hereto have entered into
this Amendment effective as of April 16, 1997.

                         CALENERGY COMPANY, INC.



                         By: /s/ David L. Sokol
                              Name:     David L. Sokol
                              Title:    Chairman of the Board



                         EXECUTIVE


                              /s/ Steven A. McArthur
                              Steven A. McArthur