BART trains could begin running in Santa Clara County before Christmas 2016 — nearly 18 months ahead of the projected 2018 timeline.

Using the promise of millions in incentives for construction companies to finish early, project director Mark Massman said it was very likely “that by the end of 2016 we should be ready to roll the trains.”

The news came Thursday as the Valley Transportation Authority approved spending $772 million to begin construction of the $2.3 billion, 10-mile extension from Fremont to the Berryessa area of San Jose east of Highway 101. All that remains now to ensure that the BART extension becomes a reality is approval by the Federal Transit Administration in February of millions in federal funding for the project.

This is the first major contract to be awarded for the project, and as the unanimous 12-0 vote was announced the 150 people in the Santa Clara County supervisors’ chambers broke into a long, sustained applause.

VTA board members called the vote historic, monumental and the most significant milestone in realizing the six-decade-old dream of bringing BART to the South Bay.

And the winning bid came in $77 million under the VTA’s estimate.

“It’s $77 million under budget and over a year ahead of schedule,” said VTA vice chairman Sam Liccardo. “What’s not to like? This is a no-brainer.”

Work will be overseen by Skanska-Shimmick-Herzog, which ranked highest among the four engineering and contractor teams that submitted proposals.

The winning bidder can get $100,000 for each day it finishes early. It can also be charged $75,000 per day if it finishes late.

“We made the schedule a big part of the bid,” said Massman. “We wanted them to know we are serious about the schedule, and they all had to figure out a better, faster way to go.

“Essentially they are four separate projects, and they’ll be working on them simultaneously. We are not going to build from end to end as you sometimes do, which means work can be done faster.”

Work is now under way in Alameda County, and earlier this week Kato Road was reduced to one lane in each direction to begin working on the new BART train crossing. Crews will spend most of next year moving utility lines and razing buildings in Milpitas and San Jose, where two stations will be built.

“In 2013, 2014 and 2015, you’ll see a major explosion in construction,” Massman said.

The VTA estimates that the work will create 9,400 jobs, with 3,800 additional jobs created to support construction of the station areas, nearby roads, parking structures and transit centers.

“Our estimate is that this will mean 13,000 jobs over the course of the project,” VTA General Manager Michael Burns said. “This is a significant economic engine for the valley. Obviously it could not come at a better time.”

Contact Gary Richards at 408-920-5335.