Jim McColl insisted the ships are not "green vessels", will spew out poisonous fumes and the infrastructure is not in place to handle them.
The ferries under construction at Ferguson Marine in Port Glasgow are the first UK-built ships capable of running off liquefied natural gas (LNG) as well as diesel.
It came as Mr McColl told MSPs former management figures at the shipyard have suffered depression after seeing their reputations "sullied" over the debacle.
He said he wished the yard had never secured the order for the two ferries, "because we'd be flying high just now with a whole load of different orders".
The Glen Sannox and the as-yet-unnamed hull 802 are at least £150 million over budget and five years late.
One is destined for the Arran route and the other will serve Skye, North Uist and Harris.
Mr McColl rescued the yard from administration in 2014 and the contract to build the vessels, which he claims was rushed through for political reasons, was signed the next year.
The yard was nationalised in 2019 amid ongoing problems with the ferries.
Giving evidence to Holyrood's public audit committee, Mr McColl said the vessels should not use LNG, and that CalMac did not want this.
He said: "There's no bunkering arrangements in place for LNG and it's going to cost a lot of money to put that in place."
He said LNG was “now obsolete technology” and an industry report had found emissions from such vessels "are 80 per cent more toxic than diesel fumes”.
Mr McColl added: "So you are now completing two vessels that are obsolete, and you're not going to run them on LNG anyway, because the infrastructure is not there.
"And if you did, you're going to be putting out poisonous gases between Brodick and Ardrossan and the other routes as well. These are not green vessels."
Elsewhere, Mr McColl was asked about the hundreds of cables that were wrongly installed on the ferries.
He said this happened because former turn-around director Tim Hair, who was appointed by the Scottish Government after the yard was nationalised, “wiped out” most of the senior management team and “all the systems we had”.
Mr McColl said former management figures were then “gagged” and had to sign non-disclosure agreements.
This left a “black hole”, he said, “and for six months nobody knew what was going on in that yard”.
Mr McColl said changes were made and equipment was moved, adding: "This is the crux of something that has been happening all along – design changes.”
The businessman said the gagging orders were "Government-imposed" and covered “most of the senior management”.
He said: "There are a few of them that have suffered depression from what's happened to them, because they have been sullied and their reputation has been sullied by some of the false statements that have been made about the quality of work prior to the Government taking over."
A report by Audit Scotland previously found there was “insufficient documentary evidence” to explain why the contract was given to the Ferguson shipyard without a full refund guarantee.
Mr McColl said former SNP minister Derek Mackay gave the yard "the green light" to apply for the contract, despite the fact it could not offer a refund guarantee.
He said Mr Mackay wrote an email saying: "You don't necessarily need to have a cash refund guarantee, [and] that something else can be negotiated.”
This happened after local SNP MSP Stuart McMillan visited the yard and then approached the Scottish Government about the issue, Mr McColl said.
"That was done well before we submitted the tender," he said.
Mr McColl called for an investigation into the fiasco "under oath" because "people need to tell the truth".
Asked if he shared any responsibility, he said he didn’t “believe so”, but later conceded the former management team had “some responsibility, absolutely, but compared to the big issue here, it's very, very small”.
Scottish Conservative MSP Graham Simpson said Mr McColl’s evidence “completely undermines the SNP’s sole defence for the entire ferries fiasco, namely that Ferguson Marine would have folded and hundreds of jobs would have been lost had they failed to award the yard the contract”.
He said: “He was adamant that this was not the case, and that he now wishes the yard had never landed the fateful Scottish Government contract because it would have prospered without it and, ultimately, been spared ‘catastrophic’ nationalisation.
“His evidence was a damning indictment of the SNP’s role in a scandal that has betrayed both our island communities and taxpayers.
"It also further strengthened the case for a full independent inquiry to get to the bottom of this murky affair.”
A Scottish Government spokeswoman said: “MV Glen Sannox and Hull 802 will be vital additions to Scotland’s ferry network and the dual fuel technology ensures they will be greener, quieter and more reliable than previous vessels.
“While LNG is not a long-term alternative to MGO [marine gas oil] for ferries, it is a proven technology that offers around 20 per cent less carbon emissions than MGO.
"It also has significant local air quality benefits, with shore-powering providing for overnight powering of vessels and significant local noise and air quality improvements for residents and crew.
“LNG infrastructure, including appropriate storage facilities and supply connections, are being developed as part of port expansion and improvement works on routes where the new vessels are expected to be deployed.”